Business community and tax experts have expressed mix reactions over the proposed federal budget 2018-19. Talking to Business Recorder, Pakistan Tax Bar Association (PTBA) president Abdul Qadir Memon said this pro-corporate sector federal budget was expected. He said the reduction in corporate tax rates by one percent each year to 25 percent in by tax tear 2023 was laudable and added that proposal to reduce the condition of distributing 40 percent of after tax profits to 20 percent and the applicable tax rate on accounting profit in case of failure to distribute such dividend to 5 percent from 7.5 percent would yield positive results. Moreover, he said that these measures would reduce cost of doing business.
However, Supreme Council All Pakistan Customs Agents Association (APCAA) chairman Arshad Jamal said instead of giving relief to the trade, the government had increase further tax by one percent at all imports, which would create hazardous impact. "By giving no relief to the exporters and industries in this budget, the government will promote de-industrialization in the country," he said.
He said they through its budget proposals suggested the government to allow the clearance of hundreds of containers, stuck at ports due to procedural lacunas, which may generate over Rs. 5 billion additional revenue but the same was utterly neglected, proving that this budget was drafted in haphazard manner. Meanwhile, Karachi Tax Bar Association (KTBA) president Khalid Mahmood said the government had proposed substantial relief in this budget with no broadening of tax base. Resultantly, already registered taxpayers will further be squeezed to meet gap between government revenue and its expenditures.
Shekha and Mufti partner Adnan Mufti cited several technical flaws in the budget, which he believed would create adverse impact. He said although the govt had proposed amendments to restrict commissioner to conduct audit once in three years, the omission of the provision that empowered the board to select cases for audit through random balloting every year would not be omitted.
Commenting on revamping the mechanism of Alternative Dispute Resolution (ADRC), he said the committee would virtually be abandoned after binding the decision of ADRC committee upon taxpayers and department as well pursuant to withdrawal of appeals by both taxpayer and the department. Moreover he said the increase in further tax by one percent was nothing but a door for corruption and the government should have taken measures for broadening of tax base to meet its revenue targets instead of burdening already registered persons.