FPCCI holds webinar on tax regime

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday held a webinar on the present tax regime in collaboration with Policy Research Institute of Market Economy (PRIME).

Economist Dr Ikramul Haq said he had designed a tax reform model that would bring paradigm shift in the taxation structure of Pakistan. Rate of tax should be flat, lower with broad tax base, he said, adding that taxpayers should not have to deal with multiple revenue and non-revenue agencies.

“Presently, all broad-based and buoyant sources of revenue are with the federal government, and contribution of provinces in total tax revenues (Rs4,748 billion) for the fiscal year 2019-20 (11.4 percent of GDP) was merely 8 percent. All provinces together generated taxes of Rs414 billion and non-tax revenues of only Rs102 billion,” he explained.

Former vice president FPCCI MA Jabbar suggested a simple, fair, and predictable tax system: 10 percent income tax on individuals, 20 percent income tax for companies, and 5.0 percent sales tax for exporters (zero percent tax). Further he asked for low-rate customs duty on all items, and federal excise duties on luxury items and on health-hazard products like cigarettes, beverages etc with due consideration for protecting the domestic industry competing the imports.

FPCCI Vice President Hanif Lakhani raised the question of meeting collection targets in the shrinking growth, which has diverted FBR to over focus on existing registered persons.