LAHORE - Hailing the Voluntary Tax Compliance (VTC) Scheme, the business community has said that the scheme will, on the one hand, help bridge fiscal deficit and, on the other hand, broaden the tax net. LCCI former vice president Kashif Anwar said that the business community on the call of Prime Minister Mian Nawaz Sharif has given a positive response to the scheme as it is aimed at country’s development.
He said the Scheme indicated that government believed in resolving the issues with understanding and consultation and this spirit would take the country forward on the path to progress and prosperity.
He lauded the resolution of a long-standing dispute between the government and the different trade bodies over the issue of taxation and said all the stakeholders who played a part in the matter, deserved appreciation.
Kashif Anwar said that main reason for tax evasion in Pakistan was the complicated tax system that discouraged many potential taxpayers from coming into the tax net.
He hoped that voluntary tax compliance scheme would have a positive impact as it would encourage documentation of the informal economy by allowing non-filing traders to regularize their undeclared working capital up to Rs 50 million by paying a nominal one percent tax for the tax year 2015.
Some countries have also announced similar amnesty schemes for increasing tax revenues, he said and added that considering the low tax revenue collection, it was a good measure to discourage unhealthy trends like money laundering and sending money through Havala.
He said currently there were hardly one million taxpayers out of the total population of over 190 million and the Scheme would bring improvement in the country’s tax-to-GDP ratio.
“Another advantage is that traders will be exempted from audit for four years and non-filers should take maximum benefit of it,” he added. LCCI former VP said the congenial atmosphere would help take the country forward on the path to progress and prosperity.
He said, good government-trader ties would help end poverty, counter terrorism, create employment and bring peace across Pakistan, particularly in the country’s nerve centre of Karachi.
FPCCI president Rauf Alam said there was a need to make progress in all areas may it be the shortage of electricity and natural gas, road infrastructure, poor economy or terrorism.
He hoped that black economy that constitutes around 30 per cent of gross domestic product (GDP) could be converted into formal economy under the amnesty announced by the government. Terming the VTC scheme unique, he assured the government that business community will not lag behind in contributing towards the country’s progress and development.
He said that the amnesty scheme will bring an end to black economy, facilitate traders in reducing cash economy, besides giving boost to investment in the country. He said that revenue losses incurred by national exchequer due to undocumented economy are met by imposing taxes on formal sector although such measures are not only unjust, but also create hindrance in broadening the tax base.