FPCCI urges business-friendly taxation regime

KARACHI: The business community has welcomed the appointment of Shabbar Zaidi as chairman of the Federal Board of Revenue (FBR), and expressed the hope that a business-friendly taxation regime would be introduced, as Zaidi represents the private sector, a statement said on Tuesday.

Office-bearers of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that Shabbar Zaidi rightly deserved the position by virtue of his long and outstanding experience in the field of chartered accountancy and is also well versed with the Pakistan’s tax laws, key policy matters governing fiscal strategy, corporate regulation, foreign exchange regime and main ailments of its economy.

They also welcomed the decision of the government for bringing a professional person on such a vibrant post to steer the country out of the challenges.

They expressed the hope that the new

incumbent would take short-and long-term measures to gradually enhance Tax-to-GDP ratio from 13 percent to its actual potential

of 26 percent, as the low ratio is mother of all economic ills such as higher tax rates; tax evasion; thin tax base; exponential increase in parallel economy; revenue shortfall etc.

The Federation of Pakistan Chambers of Commerce and Industry said of the 210 million population only 1.8 million returns were filed in

2018, which underscores the need to bring all the sectors of the economy in the tax net and wherever the income is generated be taxed with political will, as at present, manufacturing sector is overly burdened by paying 62 percent of the

total taxes in comparison to its contribution (20.3 percent) in GDP, whereas agriculture and

service sectors share in tax payment is one percent and 37 percent, respectively, although their contribution to GDP is 19 percent and 60 percent, respectively.

The Federation of Pakistan Chambers of Commerce and Industry proposed that trade bodies should be consulted in formulation of the business-friendly tax policy to ensure its smooth implementation.

It expressed confidence that the existing cordial relations between the Federation of Pakistan Chambers of Commerce and Industry and the FBR would further be strengthened for the benefit of both the stakeholders – Federal Board of Revenue and trade and industry – and assured the Federal Board of Revenue chairman of their full support and cooperation for the promotion of tax culture in the country.