ISLAMABAD, DEC 7 /DNA/ – As the tax shortfall may further widen to around Rs400 billion by the end of Dec 2024, the All Pakistan Business Forum on Saturday recommended the broadening of tax base through appropriate legislation to ensure that all income earners pay taxes equitably, including agriculture income.
The Forum President Syed Maaz Mahmood observed that against the target of Rs4.64 trillion, the FBR collected Rs4.29 trillion in five months, achieving a growth of 23%. It needs a 40% growth to reach the annual goal of nearly Rs13 trillion. He said that the IMF will assess December’s tax collection before deciding on bringing a new tax-loaded budget. So, the condition of IMF to rope in agriculture income in the tax net appeared promising in enhancing the tax collection. Otherwise the whole burden will again be shifted to the industry.
APBF Chairman Ibrahim Qureshi expressed dissatisfaction with provinces’ delay in passing new agriculture income tax laws. This new legislation is one of the conditions agreed upon with the International Monetary Fund as part of the 37-month $7 Extended Fund Facility.
Ibrahim Qureshi said that the federal government have also expressed dissatisfaction with the poor pace of adopting agricultural income tax legislations by Sindh, Khyber Pakhtunkhwa, and Balochistan. Punjab is the only province that has enacted the bill through its provincial assembly.
Syed Maaz Mahmood said that it’s a long way when the bill will turn into law and the revenue starts supporting the tax net.
Undoubtedly, there is a significant progress, both on fiscal and current accounts, showing surpluses and could lead towards a sustainable point.
The APBF President said that culture of amnesty schemes should be eliminated as it discourages the honest taxpayers, besides enacting penalties in the law to punish tax evaders.
“Appropriate laws should be made to enable the government to seize local assets, in equivalent value, or levy appropriate taxes, if any person holds any kind of assets outside the country for which source of income could not be established” he added. He said that export-oriented industries should be facilitated. He was of the view that rules, regulations and procedures for export-oriented sectors should be easy so that it could play its due role in economic stability of the country.
“It is a matter of concern that exports are showing a low growth besides the fact that country has all resources which is not a good omen” he maintained. We have to focus on investing in the energy sector, lowering of tariffs on smuggling prone items, increasing the share of direct taxes in revenue and lowering the slab of indirect taxes in the forthcoming budget to achieve key economic targets set for the new year. To fill the gap between demand and supply of the energy, maximum funds should be allocated for construction of dams/water reservoirs and tapping of Thar Coal, he added.
The APBF chief said the Protection of Economic Reforms Act”, 1992 should be amended appropriately to curb the practice of remitting undeclared income through unofficial channels outside Pakistan and the same being brought into Pakistan through banking channels in foreign exchange. He demanded the government to improve tax structure for developing business and investment. He said that the existing tax structure discourages investment and encourages rent seeking. “A better tax system would help to improve economic growth of the country, but unfortunately, the present tax system promotes rent-seeking while discouraging entrepreneurship as it imposes heavy taxes on business profits of traders” he added.
Maaz Mahmood requested the government to focus on reducing tax rates and expanding tax base by bringing all exempted sectors into the tax net and suggested that tax system should be so designed that it should give an attraction to invest in business ventures.
