KARACHI: Commercial importers paying up to 37 percent incidence of taxes on raw materials are mostly out of business because they cannot compete with imports under multiple tax and tariff regimes and smuggled materials, resulting in loss of substantial amount of revenue, said Muhammad Haroon Agar, President Karachi Chamber of Commerce and Industry (KCCI) in an exclusive interview with Customs Today.
The KCCI has always pleaded that rate of income tax, GST and Customs duty on industrial raw materials should be rationalised to enhance competitiveness of industry and curtail smuggling.
He said that the Federal Board of Revenue has been invested with absolute powers which are not feasible for flourishing business, trade and industrial activities.
At the moment, cost of doing business in Pakistan is the highest in the region on the back of high rates of income tax, WHT and General Sales Tax, high tariff on import of raw materials for the industry and shortage and high cost of electricity and gas etc.
In a recent meeting with Federal Finance Minister Ishaq Dar we had pointed out that the FBR has managed to strengthen bureaucratic control over Customs which may have serious fallout effects on trade and industry and revenue if the things were not handled in accordance with the suggestions made by the private sector for the recently announced budget, as the FBR had succeeded in convincing the Ministry of Finance for giving a shape to the customs dealing in accordance with their whims and wishes which may not be fruitful for the economy, he remarked.
The Finance Minister had, however, agreed to our point of view and promised to meet the traders and industrialists soon after his return from China and Saudi Arabia, Haroon said.
The Karachi Chamber of Commerce and Industry has also invited suggestions regarding difficulties faced by them at customs stage, and a grand meeting of all the chambers across the country would be held to develop consensus on burning issues, problems and grievances, and the KCCI is confident that these grievances would be resolved in the larger interest of the national economy, he added.
He said the measures taken in the budget on the advice of the FBR would create a number of hurdles in the way of doing business and it is feared that these measures delegating absolute powers to the FBR officials may open a floodgate of corruption and bribery. The measures regarding customs taken in the budget would not help generate revenues as money would only pack the pockets of the corrupt.
He regretted the FBR got approved two decades old measures, giving an impression that instead of moving ahead we have returned to the past.