FPCCI resents shifting federal excise duty into sales tax regime

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday resented the government move to shift the collection of the federal excise duty into the sales tax regime, a statement said.

FPCCI acting president Nasir Khan said that the business community of Pakistan is against the unbalanced policies that have been in practice in the country since long and are favouring the elite and interest groups; while promoting corruption in the government departments/institutions and the business community.

The FPCCI acting president highlighted a few problems being faced by the business community, such as the shifting of the federal excise duty into the sales tax regime.

“Prior to this amendment, the federal excise duty at 17 per cent was applicable on the raw materials at the import stage vide Table 1 to the first Schedule to read with section 3 of the Federal Excise Act, 2005; which now has been withdrawn and now the raw materials would be levied and charged with the sales tax at 17 per cent.”

Khan said that due to the current shift, the units located in the Federally-administered Tribal Areas and Provincially-administered Tribal Areas will enjoy the tax benefits of around 25 per cent, including the exemption from the sales tax in value addition mode.

Such financial benefits are only creating a huge incentive for the misuse of facilities and providing an uneven field for doing business in the country, he added.

Khan also said that this year the FPCCI presented a growth model and suggested various possible measures to improve government revenues, economic growth and national prosperity through expanded and enhanced participation from all segments of the economy.

“However, our proposals for [the] economic growth have not been given any importance. Instead, various policy measures have been announced in the budget policy that completely violate [the] human rights,” he added.

Section 203A of the Income Tax Ordinance, 2001, which empowered and expanded the discretionary powers of the Federal Board of Revenue (FBR), would only result in an increase in corruption and harassment.

“Although, Section 203A has been amended through [the] introduction of slabs, powers to arrest and prosecute will create a fearful and discouraging environment,” Khan added.

He said the provisions should be added to make the revenue board accountable, if it cannot establish any corruption or tax evasion, which is evident that 95 per cent cases are dropped in the apex courts.

Khan said that the major reason for the people not registering themselves in the tax net is due to the harassment and corruption of the FBR.