LAHORE - Chairman FBR Asim Ahmad has assured that FBR is taking all possible steps to facilitate the taxpayers. All the concerns of business community will be redressed on priority basis.
He expressed these views while talking to the President LCCI Mian Nauman Kabir. President LCCI Mian Nauman Kabir had a one-to-one meeting with chairman Federal Board of Revenue. During this meeting, he apprised the chairman FBR about the tax related issues being faced by the business community and said that FBR should facilitate the business community to get out of these stiff economic challenges which is the crucial need of the hour. The LCCI president said that a steep hike in tax revenue target from Rs. 6000 billion to Rs. 7004 billion has been proposed in recent Federal Budget 2022-23. He said that in these challenging times, such steep increase in taxation target, mainly through indirect taxation, would overburden the existing taxpayers if the new taxpayers are not added to share the burden.
He said that there is a need of offering tax incentives for potential export sectors for their encouragement including engineering, halal food, information technology (IT) and other to further enhance their potential. He further said that the global Halal Food market is above US$ 1 trillion while the share of Pakistan in the global market is negligible. He recommended that diverse sectors of the economy should be given taxation incentives for enhancing their export competitiveness as our economy cannot rely heavily on Textiles. While highlighting the potential of agriculture sector, he said that LCCI has always advocated for a renewed focus on agriculture sector and enhance its competitiveness by transforming it on modern lines. He said that the withdrawal of sales tax on the supply of tractors, agricultural implements, and various seeds including wheat, rice, maize, sunflowers, canola, and rice will certainly help to achieve this objective. He also urged that the sales tax on soya bean seeds should also be withdrawn as they are not produced locally. Mian Nauman Kabir said that FBR granted Sales Tax and Income Tax exemption to industries based in erstwhile FATA/PATA in 2018 on imports of certain raw materials for their consumption. The further exemption of FED has also been granted on 1st July 2021. These raw materials are imported and sold in different cities of Punjab including Lahore which results in heavy tax evasion. He recommended that no taxable products should enter the market without paying Sales Tax and Income Tax and imports of raw materials in FATA/PATA should only be allowed through a quota system, matched according to the respective production. He said that FBR has allowed its officers to forcefully recover taxes from the bank accounts of taxpayers without seeking approval of Chairman FBR and intimation to the CEO/owner of the company. He said that actions like bank attachment would prove to be a big hindrance in the creation of business friendly atmosphere in the country. He requested that such discretionary powers should be withdrawn.
He said that since most of the businesses operate on very low profit margins, the rate of withholding tax which goes up to 4.5% should be brought down between 0% and 1% to make sure that businesses do not face liquidity problems. He also said that government has reduced import duties on many raw materials lines and hoped that this process would continue and all the remaining raw materials which are not manufactured locally. He further stated that Tier-1 retailers are being integrated with FBR through Point of Sale (POS) system. The Policy guidelines for POS integration are not clear. The integration is being done through pick and chooses. The FBR staff is also deputed on the premises of the businesses integrated with FBR, which causes harassment.
He also proposed that a clear policy be devised for POS integration without causing harassment of business community. For the purpose of Tier-1 retailers, the condition of area specification may be removed, one shop retailers be exempted from the POS integration and the consumption of electricity units may be used as a parameter instead of cost of electricity. Keeping in view the vital importance of SMEs in the economy, he proposed that turnover threshold for definition of SMEs may be enhanced to five hundred million rupees net of Sales Tax, FED and discounts. To promote conducive business environment, rate of minimum tax under Section 113 of Income Tax Ordinance 2001 is proposed to be reduced from 1.25% to 0.5%, he added.
He said that FBR field formations start selecting cases for audit of taxpayers who file complains before the Federal Tax Ombudsman (FTO) Office. This practice of revenge needs to be stopped. He said that FBR constituted two committees last year namely Technical Committee and Complaint Oversight Committee comprising of senior officers from Federal Board of Revenue and business community with the purpose to identify and remove the technical and complaint issues of businessmen.
He recommended that these two committees may convene their meetings quite regularly in order to provide relief to the business community. And LCCI may be given representation in these two committees. He proposed that the New Tax Return Filers should be given exemption for Audit for 3 years. This will help to increase the trust of taxpayers, encourage them to file returns, resulting in increase of the tax base.
He expressed these views while talking to the President LCCI Mian Nauman Kabir. President LCCI Mian Nauman Kabir had a one-to-one meeting with chairman Federal Board of Revenue. During this meeting, he apprised the chairman FBR about the tax related issues being faced by the business community and said that FBR should facilitate the business community to get out of these stiff economic challenges which is the crucial need of the hour. The LCCI president said that a steep hike in tax revenue target from Rs. 6000 billion to Rs. 7004 billion has been proposed in recent Federal Budget 2022-23. He said that in these challenging times, such steep increase in taxation target, mainly through indirect taxation, would overburden the existing taxpayers if the new taxpayers are not added to share the burden.
He said that there is a need of offering tax incentives for potential export sectors for their encouragement including engineering, halal food, information technology (IT) and other to further enhance their potential. He further said that the global Halal Food market is above US$ 1 trillion while the share of Pakistan in the global market is negligible. He recommended that diverse sectors of the economy should be given taxation incentives for enhancing their export competitiveness as our economy cannot rely heavily on Textiles. While highlighting the potential of agriculture sector, he said that LCCI has always advocated for a renewed focus on agriculture sector and enhance its competitiveness by transforming it on modern lines. He said that the withdrawal of sales tax on the supply of tractors, agricultural implements, and various seeds including wheat, rice, maize, sunflowers, canola, and rice will certainly help to achieve this objective. He also urged that the sales tax on soya bean seeds should also be withdrawn as they are not produced locally. Mian Nauman Kabir said that FBR granted Sales Tax and Income Tax exemption to industries based in erstwhile FATA/PATA in 2018 on imports of certain raw materials for their consumption. The further exemption of FED has also been granted on 1st July 2021. These raw materials are imported and sold in different cities of Punjab including Lahore which results in heavy tax evasion. He recommended that no taxable products should enter the market without paying Sales Tax and Income Tax and imports of raw materials in FATA/PATA should only be allowed through a quota system, matched according to the respective production. He said that FBR has allowed its officers to forcefully recover taxes from the bank accounts of taxpayers without seeking approval of Chairman FBR and intimation to the CEO/owner of the company. He said that actions like bank attachment would prove to be a big hindrance in the creation of business friendly atmosphere in the country. He requested that such discretionary powers should be withdrawn.
He said that since most of the businesses operate on very low profit margins, the rate of withholding tax which goes up to 4.5% should be brought down between 0% and 1% to make sure that businesses do not face liquidity problems. He also said that government has reduced import duties on many raw materials lines and hoped that this process would continue and all the remaining raw materials which are not manufactured locally. He further stated that Tier-1 retailers are being integrated with FBR through Point of Sale (POS) system. The Policy guidelines for POS integration are not clear. The integration is being done through pick and chooses. The FBR staff is also deputed on the premises of the businesses integrated with FBR, which causes harassment.
He also proposed that a clear policy be devised for POS integration without causing harassment of business community. For the purpose of Tier-1 retailers, the condition of area specification may be removed, one shop retailers be exempted from the POS integration and the consumption of electricity units may be used as a parameter instead of cost of electricity. Keeping in view the vital importance of SMEs in the economy, he proposed that turnover threshold for definition of SMEs may be enhanced to five hundred million rupees net of Sales Tax, FED and discounts. To promote conducive business environment, rate of minimum tax under Section 113 of Income Tax Ordinance 2001 is proposed to be reduced from 1.25% to 0.5%, he added.
He said that FBR field formations start selecting cases for audit of taxpayers who file complains before the Federal Tax Ombudsman (FTO) Office. This practice of revenge needs to be stopped. He said that FBR constituted two committees last year namely Technical Committee and Complaint Oversight Committee comprising of senior officers from Federal Board of Revenue and business community with the purpose to identify and remove the technical and complaint issues of businessmen.
He recommended that these two committees may convene their meetings quite regularly in order to provide relief to the business community. And LCCI may be given representation in these two committees. He proposed that the New Tax Return Filers should be given exemption for Audit for 3 years. This will help to increase the trust of taxpayers, encourage them to file returns, resulting in increase of the tax base.
