Karachi, June 02, 2014 (PPI-OT): Zakariya Usman, President, Federation of Pakistan Chamber of Commerce and Industries (FPCCI) congratulated the Prime Minister Mian Nawaz Sharif for accepting the proposal of the FPCCI to constitute a Commission to consider its sales tax proposal of single stage – single digit non adjustable sales tax.
Earlier in the Shadow Budget, the FPCCI proposed to the Government to introduce a NO INPUT / NO REFUND MECHANISM in Sales Tax, which would instantly result in positive cash flow for businesses.
He further stated that if the Government agrees to bring the rate of sales tax down to 5% on domestic stage, 8% at Import stage and 0.5% at retail stage, this will go a long way in bringing down the cost of doing business, lowering inflation, providing relief to common man, reducing prices, eliminate corruption and would also put end to smuggling.
Zakaria Usman further stated that Pakistan can never reach the real tax potential unless fundamental reforms in tax policies and tax administrations are made and tax compliance made easy.
He applauded the bold and visionary decision of the Prime Minister to direct formation of a commission to consider single stage, single digit not adjustable sales tax regime and FBR to revert back to circle based system to reduce tax compliance burden of businessmen and bring about accountability and deficiency in FBR
Zakaria Usman with his core team members namely Shaukat Ahmed, SVP FPCCI, Mazhar Ali Nasir, VP FPCCI Zeeshan Merchant and Shahid Ahmed had already met Senator Ishaq Dar, Finance Minister on three occasions, to discuss the possibility of this proposed sales tax scheme and he said FPCCI the apex body along with its member associations is willing to partner with Government in increasing the tax base and tax revenue for the Government.
With the proposed scheme, the Sales Tax revenue are projected to rise to about Rs. 1500 billion as compared to the present sales tax revenue of about Rs. 900 billion with no extra burden on exporters.
He said the present system of sales tax is complex and there are only 19,387 are Sales Tax Payment filers. The present sales tax system encourages frauds, sales tax non-compliance and encourages business of flying/fake invoices.
A whole sales tax mafia consisting of unscrupulous persons and some tax officials has emerged. He said by bringing the rate of sales tax down to single digit of 5%, these issues can be significantly reduced and tax base could be increased many times.
FPCCI has assured the government of its full support and cooperation. The Finance Minister also appreciated the proposals of FPCCI in interest of the country.
Zakaria Usman assures the Government that FPCCI’s five people Commission will closely work with them to put the Country in the right direction and increase the tax base and quantum and at the same time reduce the tax compliance burden on the business community.
For more information, contact:
M. A. Lodhi
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Tel: 0092-21-35873691, 93-94
Fax: +9221 3587 4332
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