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ICCI for saving compliant taxpayers from more taxes in new mini-budget

ICCI for saving compliant taxpayers from more taxes in new mini-budget

ISLAMABAD: The Islamabad Chamber of Commerce & Industry has called upon the government to ensure that the compliant taxpayers were not burdened with new taxes in the forthcoming new mini-budget as putting more tax burden on the regular taxpayers for enhancing tax revenue would prove counterproductive and discourage tax culture in the country.

Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce & Industry said that the government was making preparations to announce its second supplementary budget within less than five months after presenting first supplementary budget in September 2018 to increase revenue collection and reduce fiscal deficit, but it should avoid imposing new taxes on the existing taxpayers and should instead focus on broadening the tax net that was the wise approach to improve tax revenue collection.

He said that despite tall claims for broadening the tax net, successive governments in Pakistan have not been able to increase the tax base due to which the country was facing the problem of low tax revenue. He said that out of a population of over 200 million people, FBR had reportedly received only 482,275 income tax returns for the tax year 2018 till October 2018, which reflected that many potential taxpayers were allowed to remain out of tax net. This situation was putting extra burden on the existing taxpayers and making their life miserable.

Ahmed Hassan Moughal said that according to a working paper of IMF, Pakistan had a tax revenue gap equivalent to 10 percent of its GDP or roughly $28 billion in 2016 while the country has the potential to double its tax revenue to-GDP-ratio by increasing its tax base. He said the current government has taken a wise step by separating tax policy from tax collection, however, it should take bold measures to broaden the tax base with protection to the rights of existing taxpayers.

Rafat Farid, Senior Vice President and Iftikhar Anwar Sethi Vice President, Islamabad Chamber of Commerce & Industry said that Pakistan would continue to rely on outside donors for fiscal stability until strong measures were not taken to build an adequate tax base. They urged that government should formulate a new tax policy focusing on broadening the tax base and safeguarding the genuine interests of compliant taxpayers that would help in enhancing the tax revenue and coping with fiscal deficit issue more effectively.