Foreign investor’s body looking forward to a major change in the Taxation structure and tax culture
Karachi, May 15, 2019: The Overseas Investors Chamber of Commerce and Industry (OICCI), has appreciated the appointment of well-known tax expert Shabbar Zaidi as Chairman of the Federal Board of Revenue (FBR).
The OICCI President, Shazia Syed commenting on the appointment said “Shabbar Zaidi, is a well-respected tax professional, who has been closely associated with tax policy and administration in Pakistan for many years. His appointment as FBR Chairman by the government is very commendable as it will strengthen the FBR capacity substantially”.
Shazia was confident that “with full support from a well experienced and large FBR team, the new FBR Chairman will be able to lead the needed transformation of the tax culture and significantly boost the tax collection, in line with the true revenue potential of the economy”.
OICCI reminded that in the World Bank’s 2019 Ease of Doing Business (EODB) rating, Pakistan was assessed as the 17th worst country in the world on the parameter of ‘paying taxes’. The OICCI is hopeful that with a rejuvenated FBR, supported by close coordination among the provincial tax authorities, and the government’s clear direction to improve on EODB, the country will significantly improve its EODB rating.
The recently concluded IMF–Pakistan staff level agreement also recommends tangible actions to revamp the tax regime and boost the tax to GDP ratio in line with the relevant international standards.
OICCI members comprising of leading multinationals operating in Pakistan contribute about one-third of the total tax collection, the highest by any trade body. OICCI has already submitted a series of progressive taxation proposals for the 2019-20 Fiscal Budget to FBR and provincial revenue authorities mainly focusing on facilitating investment and growth in the economy, including the need for longer-term incentives to boost FDI in the large greenfield and job-creating manufacturing facilities, and ensuring implementation of predictable, consistent and transparent policies.
OICCI has also strongly urged for Revamping of Withholding Tax Regime from current over 50 sub-clauses/provisions to less than ten, with number of tax rates reduced substantially, better coordination between Federal and Provincial Legislations, with policies and tax rates harmonized across all jurisdictions, integration of all revenue authorities in such a way that each Authority remains functional but with one window solution for filing a simplified single return for both Federal and Provincial Taxes.
OICCI has also shown serious concern on the booming illicit trade with significant damage to the revenue base of the economy and urged the authorities to re-visit Afghan Transit Trade agreement supported by structural reforms in Customs to stop the highly visible availability of smuggled foreign FMCG products. OICCI has also given workable recommendations, including the use of IT technology, for substantially improving the Documentation of the economy and Broadening of Tax Base, besides reducing the frequency of interaction of the tax officials with the compliant taxpayer.