FPCCI finds budget in contrast to proposals, seeks explanation on ambiguities

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday announced the federal budget only partly reflective of the apex trade body’s proposals, demanding explanation on ‘ifs and buts’ related to new levies

The suggestions of FPCCI have not been incorporated in the budget, while certain measures announced in the budget are partly reflective of FPCCI’s proposals, Nasser Hyatt, president of FPCCI told a post-budget news conference

Hyatt, flanked by other office-bearers said the FPCCI strongly demanded the Federal Board of Revenue (FBR) to share list of proposed additional custom duty, regulatory duty and other “ifs and buts” proposed in the draft of statutory regulatory orders to make correction in anomalies before finalisation.

“Our proposed tax model sent to the Prime Minister, Finance Minister and FBR was based on simple, fair and predictable tax system: 10 percent income tax on individuals and association of persons, 20 percent income tax on companies, single-stage 5 percent sales tax, low rate customs duty (5pc) on all items (with 15-20 percent tariff protection for local industry) and federal excise duty only on luxury and hazardous products,” he said referring to the federal budget presented last week.

Stock of anomalies from last year remained to be resolved due to not including the raw materials used in manufacturing in part II of 12th Schedule of Section 48 of Income Tax Ordinance 2001. FPCCI reiterated demand to withdraw arrest power proposed for tax officers.

Hyatt underscored need of better and effective enforcement to disable the supply of smuggled goods to retailers instead of leaving the retailers at the mercy of inspection agencies/FBR. There was a demand of withdrawal of section 127 of Income Tax Ordinance 2001, which requires depositing of 100 percent disputed tax amount for filing of appeal, “which is against the right to fair trial in terms of Section 10A of the constitution”. Likewise, the section 140 in the field of income ordinance makes FBR entitled to withdraw initial stage disputed amount from taxpayer’s bank accounts, “which does not provide the determined civil rights and obligations for a fair trial and due process”.

FPCCI president asked the government to explain sensibility in demanding invoice list in the container and subsequent penalties and confiscation of goods on non-availability at the time when it claims for promoting contactless transactions. This is also preposterous to the present trade scenario with different destinations of negotiations and transshipments and origins of goods. The tax audit by third party may be proposed in the statutes with pre-determined audit parameters and mechanism to ensure transparency, he said.