KARACHI, October 23 2024: In a significant meeting between the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Federal Board of Revenue (FBR), President Atif Ikram Sheikh underscored the urgent need to safeguard genuine taxpayers from unwarranted harassment. Sheikh reported that FBR Chairman Rashid Mahmood Langrial has agreed to focus enforcement efforts solely on tax evaders and defaulters.
During the candid discussions, Langrial requested FPCCI’s support in encouraging traders and industrialists to file tax returns fairly and transparently. The FPCCI delegation pledged to assist FBR, provided that tax collection and policymaking are conducted in a consultative manner.
Sheikh noted the withdrawal of a contentious affidavit requirement for chief financial officers, which FPCCI deemed unnecessary, as the existing Sales Tax Act of 1990 already includes adequate provisions for responsible tax filing.
FPCCI Senior Vice President Saquib Fayyaz Magoon raised concerns regarding FBR’s ambitious revenue target of PKR 12.97 trillion, a staggering 40% increase from the previous year, juxtaposed against a mere 2-3% economic growth. This disparity, he cautioned, could lead to additional taxes and budgets that further burden the business community.
Magoon criticized the abrupt withdrawal of a 1% full and final liability for exporters and the sales tax exemption for local supplies to registered exporters, stating it has eroded confidence in government policies. He also highlighted issues with the Tajir Dost Scheme, which has reportedly missed its revenue targets by 99%.
The meeting addressed concerns over SRO. 350 (I)/2024, which has faced multiple amendments yet remains problematic due to its lack of stakeholder consultation. FPCCI advocates for the revival and expansion of Alternate Dispute Resolution Committees (ADRCs) across various tax areas.
Magoon proposed simplifying the Export Finance Scheme (EFS), which currently suffers from lengthy processing times and complex procedures. He warned that including Export Processing Zones (EPZs) in the regular tax scheme could alienate investors, while local industries face exclusion from EFS benefits.
Khurram Ejaz, a member of the PM’s committee on ports and advisor to FPCCI, questioned the lack of 24/7 operations at Pakistani ports, demanding the implementation of FBR’s LIVE project to enhance customs efficiency.
Langrial acknowledged the need for reduced tax rates to alleviate burdens on taxpayers but noted that such changes are not feasible in the current economic climate. He recognized the FPCCI’s proposals concerning sales tax affidavit withdrawal, and ambiguities in SRO. 350, and the necessity for a consultative process.
Further addressing industry concerns, Muhammad Ayub, President of the Quetta Chamber of Commerce & Industry, highlighted delays in cargo clearance at Panjgur. FBR customs representatives committed to resolving the issue expediently.
Dr Jassu Mal, representing cotton ginners, lamented the tax burdens at every production stage, which inflate cotton prices and diminish competitiveness.
This meeting marks a crucial step towards fostering dialogue between FPCCI and FBR, aimed at creating a more conducive environment for genuine taxpayers and addressing the pressing concerns of the business community.
