Home / Chambers of Commerce / Demand for restoration of previous tax system gains momentum Business leader terms new income tax return system unsatisfactory

Demand for restoration of previous tax system gains momentum Business leader terms new income tax return system unsatisfactory

Islamabad: Munawar Mughal, Chairman of the Founder Group of Islamabad Chamber of Commerce and Industry has put his weight behind majority of the traders of the country who are have shown serious concerns about new income tax return system.

Mr. Mughal who is also Member of the Managing Committee of the FPCCI and has remained president of ICCI and Chairman FPCCI Capital Office said that restoration of previous income tax return system is imperative.

Talking exclusively to Pakistan Observer, the veteran trade leader said that FBR has extended the date to file returns for four times but to no avail as only 17 per cent of the taxpayers have so far filed returns which proves that the strategy employed by the tax authorities has backfired.

Many trade associations and business chambers have expressed their concerns in their internal meetings and with the tax collectors, he informed.

Munawar Mughal said that traders have no faith in the moves directed by the foreign lenders and the only resolution of the issue lies in simplicity of the system.

Small traders and industrialists on Wednesday warned the Federal Board of Revenue (FBR) of protests, if it failed to change the ‘disputed’ conditions in the income tax form for 2011-12 in line with the businessmen community’s demands.

We have decided not to file tax returns if the disputed conditions are not omitted, he said adding that anti-business tax policy should be immediately reviewed.

“I foresee that the protest against the tax policy would continue till the FBR restored the previous mode of filing returns,” he observed.

Munawar Mughal demanded of the government to introduce plans to help the financially weak traders with attractive tax policies so that the government’s annual revenue could also increase. He also urged the FBR to avoid new experiments on the traders who were already in the tax net.

Such new and controversial initiatives would have negative impact on the existing tax collection system, he said.

FBR should not avoid imposing tax of favourite sectors; it should first widen the tax base then introduce changes that should be only aimed at betterment of the country, he demanded.

Munawar Mughal warned that some traders may not refrain from getting violent in order to stop the tax recovery teams in the markets as many associations across the country have decided to resist officials.

Trading community reeling under energy outages, inflation, law and order situation and unfair taxation system have formed committees to stop the tax recovery teams from entering markets which can result in law and order situation and further drop in collections, he said.

He said that the clause “D” from the income tax return form should be deleted and recently-increased rate of turnover tax should be revised.

FBR cannot reduce the fiscal deficit by squeezing the existing taxpayers while patronising landed elites and other non-tax paying affluent sections of society, he said.

The present system of agricultural taxation has created significant distortions and inefficiency in the economy. Loopholes in the system, especially the exemptions of income tax on agricultural income, have created opportunities for tax evasion on incomes earned from non-agricultural sources, he said.

Mr. Mughal said that current moves will not help FBR in any way to support tax culture in country and boost tax-to-GDP ratio which is keeping us dependent on foreign loans.

A dialogue is needed to resolve the issues as majority of business community see new income tax return form as unrealistic and against the interest of the trading community, said Munawar Mughal.

For more information, contact:
Islamabad Chamber of Commerce and Industry
Chamber House, Aiwan-e-Sanat-o-Tijarat Road, Mauve Area, G-8/1, Islamabad, Pakistan
Tel: +9251 225 0526 and 225 3145
Fax: +9251 225 2950
Email: icci@brain.net.pk
Website: www.icci.com.pk

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