Single digit tax rate to promote businesses, enhance revenue: Mian Nauman
The Pakistan Industrial and Traders Association Front (PIAF) Chairman Mian Nauman Kabir has called upon the government to reduce the existing 17 percent sales tax rate to the single digit in the forthcoming budget 2021-22, as it would help promote the business activities, besides improving tax revenue as well in the country.
The PIAF Chairman, in a joint statement with vice chairman Javed Siddiqi, said that the main advantage of reducing the sales tax to single digit will be giving relief to the common man, especially to the low and middle income group by reducing inflation. He said that the lower rate of sales tax will increase the revenue, and discourage malpractices in input and adjustment. It will give the industry a breathing space against the menace of smuggling, which is widespread in the country. The simple procedures in sales tax will give the government an opportunity to work more efficiently within the sales tax department.
He also demanded incentives that would transform the existing infrastructure into an efficient network and bring radical changes in the society through improved socio-economic indicators. He observed that the government has not taken stakeholders onboard to discuss the upcoming budget. The objectives of our budget proposals should be revamping the taxation system, documentation of the economy, employment generation through industrialization, promoting a responsive and equitable taxation system, infrastructure development and trickledown effect of the fiscal space to the grassroot level.
The PIAF fully supports the recommendation of FPCCI and LCCI to reduce sales tax rate gradually from the current 17 percent to single digit, to abolish all duty and taxes on the imports of all machinery and imposition of taxes on final goods, he added. The Mian Nauman also suggested the establishment of export warehouses at the border for enhancement of trade with neighbouring countries and bringing the agriculture and service sectors into the tax net proportionately. He also proposed to increase the education and health budget for improving human capital in Pakistan.
He suggested that government should use the data of domestic and international travelers for identifying potential taxpayers and bringing them into the tax net. He underlined the need for the promotion of SMEs culture in Pakistan and suggested that the government should formulate a mechanism for monitoring consumer goods prices.
He also requested the government to take the business community on board in the finalisation of agreement with IMF and highlights IMF conditionalities publicly.