Islamabad, May 24, 2019 (PPI-OT): The Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to focus on drastic tax reforms in the forthcoming budget to improve tax revenue as the prevailing taxation system have failed to enhance taxes up to the real potential of the country.
Ahmed Hassan Moughal President, Rafat Farid Senior Vice President and Iftikhar Anwar Sethi Vice President, Islamabad Chamber of Commerce and Industry said that government was reportedly aiming to introduce new tax measures equal to Rs.775 billion in the forthcoming budget for the fiscal year 2019-20. However, they said that without addressing the flaws in the current tax system and introducing revolutionary reforms, achieving desired tax targets would be an uphill task.
They said that FBR’s new Chairman Shabbar Zaidi himself have stated that only 300 major taxpayers were contributing 80 tax to the total tax revenue of the country which showed that the current tax system was not helpful in tapping untapped tax potential in Pakistan. They said that Pakistan was ranked at 172 in ease of paying taxes out of 189 countries, which showed that tax payment procedures were quite difficult in the country.
Ahmed Hassan Moughal said that the prevailing taxation system was quite unfair as it was not collecting taxes from all sectors of economy accordingly to their tax payment potential. He said that agriculture was contributing 21 percent to country’s GDP, but was paying less than 1 percent in tax revenue.
Similarly, industry was contributing 13 percent to GDP but was contributing 52 percent to tax revenue while services sector was contributing 58 percent to GDP, but its contribution in tax revenue was just 37 percent. He urged that government should address these anomalies in the tax system and try to develop a fair tax system that would help in generating more tax revenue.
ICCI President said that government in the new budget should focus on enhancing the share of direct taxes from its current 40 percent in total tax revenue as indirect taxes were putting more burden on the common man. He said that tax rates in Pakistan were also quite high and were a major cause of tax evasion in the country. He urged that government should reduce tax rates and focus on broadening the tax base that would help in improving tax revenue of the country.
For more information, contact:
Islamabad Chamber of Commerce and Industry (ICCI)
Chamber House, Aiwan-e-Sanat-o-Tijarat Road,
Mauve Area, G-8/1, Islamabad, Pakistan
Tel: +92-51-2250526, 2253145, 8432676
Fax: +92-51-2252950
Email: icci@brain.net.pk, info@icci.com.pk
Website: www.icci.com.pk