Khalid Iqbal Malik, President, Islamabad Chamber of Commerce and Industry (ICCI) on Saturdaycalled upon the Federal Board of Revenue (FBR) to introduce drastic reforms in consultation with private sector in the taxation system as the prevailing tax regime has failed to improve tax revenue and achieve annual tax collection targets.
He said that despite applying all tactics and means, the tax authority has missed the annual tax collection target which was a cause of concern as it would create new problems for the economy.
He said that the Parliament had approved tax collection target of Rs3.621 trillion for FY2016-17 while the Federal Finance Minister had revised it downward to Rs.3.521 billion, but FBR reportedly collected Rs.3.330 billion till June 30, 2017 which showed that the tax authority has failed to achieve even the revised tax collection target.
He said that the shortfall in tax revenue has surfaced despite the fact that the federal government had levied additional taxes and charged higher sales tax on petroleum products. He said this state of affairs showed that the present tax system was not helpful in promoting business activities and strengthening the economy.
Khalid Malik said that to show improved tax revenue, the tax authority used to withhold billions of rupees of tax refunds of business community every year, which was unfortunate. He said the tax refunds of around Rs.300 billion were still stuck up with the FBR due to which the exporters and businessmen were facing liquidity problems. He stressed that FBR should clear all tax refunds on urgent basis that would facilitate in improving country’s falling exports.
He said the high tax rates and large number of taxes in Pakistan was major hurdle in promoting tax culture in the country. He emphasized that the authority should bring down tax rates and reduces number of taxes that would be instrumental in encouraging tax culture and improving tax revenue.
He said instead of putting more burdens on existing taxpayers, FBR should focus on expanding tax base that was the best approach to enhance tax collection. He said that an easy and business friendly tax regime was the key to put the economy of fast track growth.