LAHORE - The Lahore Chamber of Commerce and Industry on Monday linked the imposition of Value Added Tax to capacity building of Federal Board of Revenue. Unless and until the institutional framework is strengthened, the imposition of VAT would not be doing any service to the economy and the government as it would open the floodgates of corruption. In a joint statement issued here, the LCCI President Zafar Iqbal, former LCCI President Sheikh M Asif and Convener Standing Committee on Finance & Taxation Shahzad Azam Khan said that the business community understands well Value Added Tax would help stop smuggling and under invoicing but they doubt the FBR ability to ensure VAT implementation across the board. The businesses that would be paying VAT would become uncompetitive when some others would not be filing Value Added Tax by bribing the black sheep therefore it would be wiser on the part of the Federal Board of Revenue to strengthen its institutional capacity before coming into VAT mode, they said. The imposition of value added tax not acceptable unless all the stakeholders are taken on board. All the trade bodies and chambers would strongly protest against the imposition of VAT if it was implemented in a hurry. They said that it should also be cleared by the FBR that VAT would not be implemented on zero rated sector. They said that the business community also strongly disapproves FBRs move to declare certain taxpayers as risky. The business community will not tolerate any measure by the tax department that will tarnish the tax profile of the taxpayers. They said that in the present circumstances, when country was facing a wave of terrorism, energy shortage and sheer price hike, the steps proposed by the tax dept. would further aggravate the situation. The LCCI President said that in order to cultivate the culture of voluntary tax payments, the taxpayers should be facilitated and guided, and instead of imposing harsh penalties, minor mistakes should be rectified. Audit without deciding specific criterion in consultation with the trade and industry, is not acceptable and discretionary and arbitrary powers of the tax officials in this regard should be curtailed forthwith, they added. The anomalies between the Sales tax and the income tax laws should be removed especially the prescribed limit of sales to be done through cheque. It was highlighted that law on withholding of ST by the LTU taxpayers is very ambiguous and should be done away with.