KCCI shocked over proposed tax in next budget

May 29, 2013 Off By Web Desk

KARACHI: Karachi Chamber of Commerce & Industry (KCCI) has expressed deep concern over the news in media about further tax which is proposed to be the part of upcoming Federal Budget 2013-14.

As per the news, Federal Board of Revenue has made additional taxation measures in the draft Tax Laws (Amendment) Ordinance, 2013, which is part of the new budget proposals for 2013-14. The said Ordinance contains additional taxation measures of Rs. 200 billion for 2013-14. Through the draft Tax Laws (Amendment) Ordinance, 2013, the FBR proposed to increase standard rate of sales tax from 16 to 17 percent and are going to impose 2 percent ‘further tax’ on supplies to un-registered persons, 17 percent sales tax on sugar and proposed imposition of 10 percent withholding tax on domestic electricity consumers having monthly electricity consumption of over 1000 units.

Some other measures and anti-business actions deliberately taken by FBR are aimed at destroying the economy as it will encourage black economy, smuggling, tax evasion, under-invoicing, misdeclaration resulting decline in exports.

Across the board increase in taxes by FBR has come as a shock to the business and industrial community all over Pakistan. The incompetence and lack of will on the part of FBR to broaden the tax base is reflected in the drastic increase in GST and WHT on existing taxpayers and is a short-cut to achieve revenue targets. The measures are bound to fail and will result in widespread protests by the trade and industry.

Against the proposals of apex bodies all over Pakistan which have demanded reduction of GST to 8-9%, the FBR has proposed an increase in Standard Rate of Sales Tax upto 17%. This measure will result in tax evasion and discourage new potential tax payers. Tax collection will not increase as a result of increase in GST rate.

Karachi Chamber is of the view that the FBR has no will and intention to broaden the tax base and instead of bringing those untaxed individuals with massive wealth and substantial income into the tax net, the FBR is using the conventional tactics of squeezing the honest tax payers who are already in the net.

The trade and industry out rightly rejects the proposed measures and will not accept further taxes and draconian measures which are going to harm the business climate and will have a negative impact on overall economy. KCCI also believes that such measures should be implemented after the consultation with leading chambers of commerce and industry.

KCCI terms this as a conspiracy against the incoming government. KCCI totally rejects these measures and hopes to have interactive session with new Finance Minister and his team for pragmatic steps for widening tax net in order to collect required revenue for the progress of our beloved nation.