Says FBR should withdraw withholding tax on banking transactions, discretionary powers of tax officials
LAHORE: The regulatory duty on imported items will push-up smuggling in the country and the government must focus on increasing exports by facilitating local industry to meet the trade deficit. The Federal Board of Revenue (FBR) should withdraw withholding tax on banking transactions and discretionary powers extended to the tax officials under Sales Tax Act 38-B and 40-B are creating panic among the business community.
These views were expressed by Gulberg Board Traders Association President and Lahore Chamber of Commerce and Industry executive committee member Mian Zahid Javaid while talking to Customs Today here the other day.
The president said the local industry should be given level playing field to increase exports while the raw-material should be exempted from regulator duty so that the traders using the raw-material could claim rebate on finished products.
He said that unjustified levies like withholding tax are discouraging the new taxpayers and obstructing the expansion of tax net. He said that chairman Federal Board of Revenue and chairman Senate Standing Committee on Finance and Revenue should take immediate notice of this longstanding issue that is causing trust deficit between the business community and the government.
“New strategy will be evolved if these issues are not resolved by the end of current month”, Javaid held.
He said that indirect taxes are being removed gradually throughout the world, here in Pakistan these are contributing around 60 percent to the revenue despite the fact that expenses on this practice are higher than the collections.
The LCCI executive member said that FBR should stop harassing filers as non-filers and ones outside the tax net are not accounted for at all which discourages businesses to come into the tax net. Registered businesses are required to comply with various departments involving a lot of financial and time resources whereas unregistered businesses are free from all such hassles.
He highlighted that there are 3.5 million registered taxpayers out of which only around 1 million file their tax returns. Government should take all the measures to ensure filing of returns by remaining 2.5 million individuals and businesses. The government claims that it always acts as a facilitator but in this scenario it is entirely otherwise.
He said that attaching bank accounts for recovery of outstanding dues is hampering business growth and tarnishing the business-friendly image of the government. He explained that bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of commissioner in the light of reply submitted by the taxpayer.
He hoped that FBR should withdraw withholding tax on banking transactions and unlimited discretionary powers to the tax official in the larger interest of the trade and industry.