No relief to businessmen: FPCCI accuses tax authorities of manipulating budget

Shahnawaz AkhterWeb Editor

24th Jun, 2021. 03:20 pm
FPCCI accuses tax authorities

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has accused the tax authorities of manipulating the Federal Budget 2021/22 by proposing anti-business and anti-growth measures in the document.

In this regard, the apex trade body sent a letter to Prime Minister Imran Khan on Thursday and held the Federal Board of Revenue (FBR) responsible for making the federal budget anti-business and anti-growth by introducing income tax statutes, e.g., Section 203A and Section 127 of the Income Tax Ordinance, 2001, through which the tax authorities have sought to enhance their discretionary powers.

FPCCI President Mian Nasser Hayat Maggo said that Finance Minister Shaukat Tarin must have lived up to his promise that the budget would not be finalized without taking FPCCI into confidence.

In February 2021, well before the budget, the apex trade body had proposed simplification of the tax system and reduction in the tax rates to the prime minister, he said, adding that the prime minister had directed the FBR to look into the FPCCI’s recommendations.

“But unfortunately, the FPCCI’s recommendations on tax reforms were not incorporated in the budget,” Maggo added.

The FPCCI president also said the revenue board did not give representation to the apex trade body in this year’s anomaly committee. “Historically, the FPCCI had always helped the government in finalizing the budget through addressing most of the anomalies and contradictions,” he said.

The FBR had included tax layers into the sub-committee, which is in conflict and against neutrality, he said, adding that the lame clarification being given by the FBR on income tax statute on Section 127 of the Income Tax Ordinance, 2001 was illogical and the FPCCI is of the view that the finance minister must not have given the approval to issue such clarification on Section 127.

“Section 127 is also in contradiction to the structure of the Constitution of Pakistan and defies Section 10A of the Constitution blatantly.”

The FPCCI demanded the separation of the tax judicial system from the tax-collecting machinery to comply with the Constitution. “This best practice recommendation was also overlooked,” Maggo said and suggested that the apex trade body demands the incorporation of this provision in the final draft of the budget.

The FPCCI chief also expressed concern over the non-withdrawal of CNIC conditions on the sale of goods, which continues to hinder business and trade activities and growth within the country. He recommended the tax policy unit under the finance minister should formulate the taxation system in the budget and not the FBR.

“Sectoral strengths, weaknesses, and needs should be properly analyzed before imposing any form of taxation by the tax policy unit. [The] FPCCI firmly believes that the current budget, proposed and manipulated by the FBR, is strictly conventional in nature and does not provide relief to businesses and does not promote economic growth,” Maggo said.

Various industries and sectors have been compelled to spend millions of their hard-earned funds to advertise in the print media and make their voice heard. The letter pointed out that the proposed budget was full of anomalies and contradictions; therefore, it should be revised in consultation with the business community before its approval.

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