LAHORE - The financial emergency should be declared in the country after record trade deficit in July 2015.
“Pakistan is fast losing export market due to lack of enabling policies for the export sector huge decline,” observed the leadership of Pakistan Industrial Traders Front in their address to economic reporters on present economic scenario of the country. The meeting was attended by PIAF chairman Irfan Iqbal Sheikh, LCCI former SVP Sheikh Muhammad Arshad, PPMA former VP Kh Shahzeb Akram, LCCI former president Muhammad Ali Mian etc.
LCCI former SVP and the PIAF-Founder Alliance candidate for president for the Chamber’s upcoming elections, Sheikh Muhammad Arshad said that Pakistani exporters are finding it difficult to compete with other countries resulting in their retreat from international markets which must get immediate attention of the authorities concerned.
An ambitious export target of 50 billion dollars has been set in the proposed trade policy while the ground realities are otherwise, he said and added the graph of export is showing downward trend, calling for immediate steps to bail out the troubled export sector, observed Sheikh Arshad, who is being considered the strong candidate for the slot of LCCI next president.
Sheikh Arshad said that the economy is not the focus of the government, rather its economic managers are busy in achieving revenue target, as over 80pc of total taxes are collected by businessmen indirectly on behalf of FBR. The government has devised recently another indirect way of harassing businesses by levying 0.3 percent withholding tax on all bank transactions above Rs50,000. He said this job is assigned to the banks. He wondered about the operating a huge department like FBR when all taxes are to be collected indirectly.
He said all traders want full documentation as they are paying indirect taxes in higher amount then their actual tax liability. He said 100 million mobile phone subscribers pay both income tax and sales tax on their bills. He said the 13 million power consumers pay GST and those with higher bills pay withholding tax as well. Same is the case in gas bills, he added.
PIAF Chairman Irfan Iqbal Sheikh said those who are income tax filers are entitled to get refund of all the withholding taxes they pay after they have filed their tax returns. However, no refunds have ever been made. When the FBR operates with such high handedness how could it lure non compliant persons into tax net? He said small traders are afraid of the arm twisting tactics of FBR and the track record of the government that continue to squeeze those only that are in tax net.
Irfan Iqbal said these issues have increased from bad to worse because no government in past four decades tried to address them and operated on adhocism. He said there is solution to all these drawbacks provided the rulers show the political will. He said tax collecting machinery is generally busy in finding out ways to enrich their purses through draconian laws, as 85 percent of the income tax is collected through businessmen that act as withholding agents.
Similar most of the sales tax of entire value chain is deposited by the businessmen in the national kitty without any effort by the tax collectors.