KARACHI-Irfan Iqbal Sheikh, President FPCCI, has apprised that the high-powered Reforms & Resource Mobilization Commission (RRMC) of the government of Pakistan with a full-fledged secretariat at the FBR head office and headed by the world-renowned chartered accountant, Ashfaq Tola, has reached out to FPCCI for the proposals on taxation reforms; mobilizing & saving national resources and federal budget 2023 – 24.
Irfan Iqbal Sheikh explained that in order to make any revenue reforms to succeed, those should be based on three basic yet far-reaching guiding principles, i.e. simplification of taxation system; broadening of the tax-base and accountability of the tax collection machinery. It is pertinent to note that FPCCI’s president or his nominee has been made a part of RRMC as well. FPCCI chief highlighted that the time has come that all the state-owned enterprises (SOEs) in general and loss-making SOEs in particular should be privatized; as their combined annual losses have reached PKR5,000 billion. Doing business is none of government’s business and no economy can withstand that much losses as compared to their GDP; let alone a struggling like Pakistan.
Suleman Chawla, SVP FPCCI, maintained that the biggest issue with meaningful participation in the budget-making exercise is that most of the recommendations and proposals forwarded to the federal government, through the platform of FPCCI, are not given due consideration; which in turn, discourages the business, industry and trade community – as FPCCI is their apex body. Suleman Chawla added that there is a string sentiment in the business community that taxation policies are not made based on the hard facts or ground realities of Pakistan; but rather, based on the dictates of the international lending agencies like IMF, World Bank, Asian Development Bank, etc. The big question arises here that how the policies having a big disconnect with the national economy can result in business, commercial, trade or economic development of the country!
Shaukat Omerson, VP FPCCI, demanded that taxation system should be simplified specifically for SMEs as they do not have the resources to hire top consultants or lawyers in case of any disputes or anomalies. He also called for the rectification of the imbalance between direct & indirect taxes to make country’s taxation system fair, transparent and easy-to-comply with. Ashfaq Tola, chairman of the Reforms and Resource Mobilization Commission (RRMC), said that he is aware of the difficulties being faced by the business community as he has decades-long experience as a businessman himself. He also proposed that FPCCI should send a unified budget proposal for the federal budget 2023 – 24; encompassing recommendations of all the 250 chambers, trade bodies and association; as this exercise will eliminate the contradictions within the business community in their respective proposals. Ashfaq Tola added that the government is aiming to set a revenue collection target of approximately PKR 9 trillion for FY24. However, almost 60 percent of total revenue collection goes to provinces; and, in FY23, total collection will be approximately PKR 7.5 trillion. Additionally, most of the resources go towards debt servicing and very little is left for the developmental expenditures. We need to get out of debt trap through reforms and resource mobilization, he added.