Dr Muhammad Ashfaq, Chairman of the Federal Board of Revenue (FBR), warned on Sunday that further tax exemptions would be phased out soon.
In contrast, he stated during a gathering of the Lahore Chamber of Commerce and Industry that the sales tax rate would be reduced within one or two years. On the occasion, LCCI President Mian Nauman Kabir, Senior Vice President Mian Rehman Aziz Chan, and Vice President Haris Ateeq spoke.
“We must assume responsibility for effectively administering the country so that future generations are not harmed.” At the moment, the tax-to-GDP ratio is around 12%, whereas expenditures are around 20% of GDP. An 8% difference is controlled by loans that must be repaid by future generations. To close the 8% gap, we must pay taxes, according to the FBR chairman.
He claimed that taxpayers who made their systems transparent would have no issues. He said that import tariffs had been levied on plants and machinery from all around the world.
“We have one of the best return systems in the world.” Within 72 hours, sales tax refunds are processed. To prevent the use of phony CNICs for transactions, the requirement of the purchaser’s CNIC is a must,” he stated.
Dr. Ashfaq remarked that attaching bank accounts was a more civilized method of recovery than sealing homes or business premises. He stated that the misuse of tax exemptions in FATA and PATA must be addressed. He stated that a system would be established soon to correct the situation.
“In the future budget, withholding tax will be rationalized. The minimum tax has collected Rs100 billion, but it will be phased out over the next three to four years,” he added, adding that more tax exemptions will be phased out in the upcoming budget.
Various taxing policies included in the Finance Supplementary Act 2022, according to Mian Nauman Kabir, will have a negative impact on the economy and industry’s growth. He claimed that the cost of conducting business has risen dramatically in recent years.
Increase the amount of renewable energy, particularly solar, in the energy mix to reduce the cost of power production, according to the LCCI president.
“Removing sale tax exemptions on seeds will have a negative impact on crop yield,” he claimed.
Tier-1 retailers had been linked to the FBR via a point-of-sale (PoS) system, but without defined policy rules, he claimed. He went on to say that having FBR officers stationed at businesses with PoS was generating harassment. To stop harassment of the business sector, he advocated the creation of a clear policy for POS integration.