Karachi (PR): The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) convened a second post budget meeting to discuss the anomalies in the Federal Budget 2013-14 under the Chairmanship of Mr. Zubair Ahmed Malik, President FPCCI at Federation House, Karachi. The meeting was attended by leading businessmen including Mr. Tariq Sayeed Vice President CACCI and Mr. S. M. Muneer, President India-Pakistan Chamber of Commerce and Industry, Mr. Gulzar Firoz, Mr. Shaheen Ilyas Sarwana, Mr. Abdul Khaliq Khan, Mrs. Rukhsana Jehangir Vice Presidents FPCCI and representatives of different sectoral associations, local chambers and Town Associations and technical experts on taxation. The meeting conducted separate sessions on the issues related to Sales tax, Income tax, Custom duty and Federal Excise Duty.
It was decided in the meeting that government should sit with FPCCI for resolving the anomalies in the budget which will adversely affect the poor masses of the country, as well as the business community particularly the industry which is already confronted with many challenges e.g. load shedding and law and order situation.
The participants of meeting view that this budget will cause closure of industries increase the smuggling and lead to corruption. They further said that the Federal Budget has made Pakistani goods uncompetitive in the region and main focus has been on collection of taxes and revenue generation from the existing tax payers instead of broadening of tax base. They said that government has failed to bring wholesale, distribution network and retailer with in sales tax net, the net burden to collect additional amount of sales tax has been passed on to the manufacturer, producer or importer of these items.
They further stated that the Business Community agreed in principle with the concept of CREST U/S 2(5AC), but it is not being applied by the department in letter and spirit due to teething problems and taxpayers are being unnecessarily harassed. In this context, it is requested that some time should be given before implementation of CREST to discuss its modalities with FPCCI. Moreover, on Section 21(4) he proposed that input tax adjustment / refund may be blocked after completing due process and recording of reason in writing. Referring to the measure on Sales Tax record U/S 22, they said that registered persons are required to maintain and retain gate passes, inward or outward, and transport receipts as Sales Tax record. The increasing compliance cost of keeping a plethora of records in this age of technology would over burden genuine taxpayers unnecessarily. They also said that for monitoring of tracking government has again tried to implement the old Central Excise Law 1944, which is an invasion of privacy and against the spirit of FBR reforms which are meant to facilitate taxpayers and restore their confidence. For section 40(B), he suggested that the power of posting Inland Revenue Officers should rest with FBR so that the confidence of the taxpayer, a prerequisite of the success of any scheme, is not shattered. Moreover regarding appeal U/S 45(B), the time limit of 30 days may be removed.
Referring to the introduction of Income Support Levy @ 0.5% on all movable assets the businessmen said that this move will discourage investments in Pakistan one side and encourage black market on the other side. He said that it seems like the wealth tax regime which only exists in very few countries of the world, is being brought in Pakistan.
They further lamented that furnishing of bank data to FBR will discourage depositors from depositing savings in banks on one hand and encourage the growth of the black economy on the other. FPCCI is also of the opinion that an increase of turnover tax to 1% U/S 113 of Income Tax Ordinance shall have a negative impact on industrialization and hence it should be brought down to the previous level of 0.5%. He suggested that the depreciation allowances should be restored to its previous level of 50% from the proposed reduction to 25% because it will hurt the Balancing, Modernization and Reconstruction (BMR) activities of the industry. Furthermore, They said that the power to select cases for audit on the basis of parametric computer random balloting should be retained with FBR instead of with the Inland Revenue Commissioner as proposed in the Finance Bill as it will again encourage corruption and increase harassment of the taxpayers due to misuse of power.
The President of FPCCI has therefore invited the Finance Minister to hold a meeting with FPCCI to discuss the harsh and irritant measures in the Finance Bill 2013 with a view to improve its impact on trade and industry. He further assured that FPCCI is willing to sit with the Government to sort out these issues before resorting to any harsh measures in the interest of economic recovery.