Convention of All Pakistan Chambers & Associations
Chamber of Commerce & Industry of the country and trade & industrial associations has given the deadline of 10 April to the Federal Board of Revenue for acceptance of their demands. Till than Chambers will hoist black flags and office-bearers and executive committees would bear black bands.
At a Convention on “FBR’s Discretionary Powers” here at the Lahore Chamber of Commerce & Industry, representatives of Chambers of Commerce & Industry and trade & industrial associations said that despite repeated appeals, discretionary powers of FBR officials have never been withdrawn that is the biggest restraint to broadening the tax net.
The LCCI President Abdul Basit, Senior Vice President Amjad Ali Jawa, Vice President Muhammad Nasir Hameed Khan, Former Presidents Bashir A. Baksh, Mian Muhammad Ashraf, Mian Anjum Nisar, Mian Misbah-ur-Rehman, Shahid Hassan Sheikh, Mian Muzaffar Ali, Muhammad Ali Mian and Farooq Iftikhar, Zeeshan Khalil, Rehman Aziz, Tahir Manzoor Chaudhry, Shahrukh Jamal, Ali Hassam Asghar, Muhammad Nawaz, Shahid Nazir, Awais Saeed Piracha, Nadeem Qureshi, representatives of Chakwal, Faisalabad, Gujranwala, Gjrat, Jhelum, Karachi, Khaniwal, Mohmand Agency, Peshawar, Quetta, Rahim Yar Khan, Rawalpindi, Sahiwal, Sargodha, Sheikhupura, Shikarpur, Sialkot, Vehari, Hazara, Faisalabad, Mardan, Lahore Women Chambers of Commerce & Industry, Air Cargo Agents, All Pakistan Cotton Power Looms, All Pakistan Dry Fruit Importers & Exporters, All Pakistan Textile Mills, All Pakistan Textile Processing Mills, Fleet Operators Association, Pakistan Cotton Ginners, Pakistan Electric Fan, Pakistan Ethanol Manufacturers, Pakistan Kiryana Merchants, Pakistan Steel Linepiple Industry, Pakistan Steel Melters, Pakistan Tanners, Pakistan Vanaspati, Pakistan Yarn Merchants, Rice Exporters, Travel Agents, Pakistan Footwear Manufacturers and Builders & Developers Associations were invited to the Convention.
On the occasion, participants of the Convention issued a joint declaration saying that “oppression of FBR staff has become unbearable. Businessmen are working in difficult conditions but instead of giving due honor, FBR staff is twisting their arms and black mailing them therefore discretionary powers should be withdrawn immediately.”
The Convention urged the government to withdraw the draconian provisions and laws giving immense discretionary powers acquired through last four Finance Bills, to the officers of Inland Revenue and field formations which is a core issue and resulting in hardship, loss of productivity and mental torture to the business community. These laws have kept a large number of potential tax-payers out of the tax regime. In fact these laws are a deterrent to broadening of tax-base and resulted in promoting the culture of tax-evasion. They urged the government to implement their recommendations in true sense of word.
All Chambers and trade bodies strongly denounced the misuse of discretionary powers by the officers of IR under Sections 38A, 38B, 40A, 40B, 176 and 177. They also urged the government to withdraw these sections immediately and restrict the enforcement of the said sections.
“In case these demands are not accepted by the authorities concerned, the participant chambers and associations will resort to all possible lines of action within their legitimate rights including remedy from competent courts of law to have their demands accepted to withdraw the discretionary powers of the FBR and officers of Inland Revenue”, they added.
The LCCI President Abdul Basit said that during last three years, tax collection has increased about 60% whereas number of persons who filed tax returns has almost decreased by 200,000. It simply reflects that FBR could not succeed in broadening the tax net resulting in squeezing existing tax payers. Revenue collection through indirect taxes is almost 62% of total tax collection which cannot be encouraged. Pakistan lacks culture of tax compliance due to unfair taxation system. Harmful taxation that hinders business and trade in the country should be eliminated. We firmly believe that broad based reforms in taxation system with the consultation of private sector are need of the hour.
The LCCI President Abdul Basit, Senior Vice President Amjad Ali Jawa and Vice President Muhammad Nasir Hameed Khan 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. The government claims that it always acts as a facilitator but in this scenario it is entirely otherwise. 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. They said that if there is an urgent need for stock taking and ascertaining the Sales Tax liability of any particular business unit, the FBR officials should be directed to take association / chamber concerned on board.
They said that attaching bank accounts for recovery of outstanding dues is hampering business growth and tarnishing the business-friendly image of the government. Bank accounts should not be attached.
They said that FBR should focus on rationalizing the withholding tax regime which is being widened each year. To accomplish these responsibilities, withholding agent need to incur substantial time and cost, without any incentive. They proposed that a tax credit should be given to withholding agent performing state duties. This tax credit should vary in slab based on withholding tax deducted and deposited by Withholding Agents. They said that there must be harmonization in Federal & Provincial tax regime to counter double taxation and harassment by the Provincial Tax Authorities. Due to non-collaborations between various taxation bodies like Federal Board of Revenue, Punjab Revenue Authority and Sindh Revenue Board, etc., problems like jurisdiction disputes, non-uniformity of provincial laws are arising.
Participants of the Convention said that government should resolve the issues being faced by the business community otherwise a joint strategy would be evolved to counter arbitrary and unilateral approach of FBR officials, policy-makers and Ministry of Finance.