Islamabad, July 17, 2012 (PPI-OT): Islamabad Chamber of Commerce and Industry (ICCI) has appreciated the proposed reduction by Federal Board of Revenue (FBR) in the withholding tax rate from 0.5% to 0.1% under Section 153A of the Income Tax Ordinance, 2001.
Welcoming the proposed initiative, Yassar Sakhi Butt, President ICCI said that this step would provide immediate relief to business community because it was already burdened with heavy taxes and was striving hard for survival due to many challenges to the economy.
ICCI President said that the current rate of withholding tax puts undue tax burden on dealers, wholesalers and retailers, therefore, bringing down this tax from 0.5 to 0.1 percent would be a wise approach to encourage tax culture in Pakistan. He said empirical experience proves that high tax rates have always promoted a culture of tax evasion while low tax rates broaden tax base by luring potential taxpayers into tax net.
Yassar Sakhi Butt was of the view that government can bring a hefty improvement in tax revenue by rationalizing tax rates and bringing exempted sectors into the tax net. He also stressed for making refund processes easier as large amounts of businessmen were stuck in refund claims due to complicated refund procedures.
He said that government has imposed withholding tax under Section 153A with the main objective of documenting businesses. However, he proposed that this tax should be imposed only on those distributors/dealers/wholesalers who are not registered under Income Tax and do not carry NTN Number while the NTN holders are already documented.
ICCI President underlined the need to educate the small and medium taxpayers about the basics of sales tax registration and other procedures of sales tax laws. By ensuring the transparency, accountability and access to justice could improve tax culture in Pakistan, he maintained.
For more information, contact:
Islamabad Chamber of Commerce and Industry
Chamber House, Aiwan-e-Sanat-o-Tijarat Road,
Mauve Area, G-8/1,
Tel: +9251 225 0526 and 225 3145
Fax: +9251 225 2950