ICCI for focusing on Direct Tax in forthcoming Budget

  • May 19, 2012
Government should maintain an appropriate balance between direct and indirect taxes as ever-increasing burden of indirect taxes have adversely affected common man and businesses as well.

Government must increase its dependence on direct taxes and move away from indirect taxes because any further increase in indirect taxes would not only be inequitable but it may also have negative consequences for the overall economy, Yassar Sakhi Butt, President Islamabad Chamber of Commerce & Industry (ICCI) has stated this in a statement.

He said that indirect taxes currently account for more than 60 percent of the total revenues while direct taxes to GDP ratio was merely 2 percent which has been badly affecting consumer spending that is a key driver of economic growth. Therefore, Government should not levy more indirect taxes in upcoming budget of 2012-13 on consumers and other sectors of the economy and ensure an equitable and transparent taxation system, he maintained.

President ICCI underlined the need for revamping the taxation system of the country on the modern and progressive lines, which is essential for controlling inflation on a sustained basis.

He said that Government should also abolish a number of indirect taxes which were being charged from the value-added industries for enabling them to compete in the international market as levying of various indirect taxes on these industrial units were causing  serious threat by increasing cost of production of export-oriented industries.

Yassar Sakhi Butt stressed upon the Government to bring down the rate of turnover tax in the upcoming federal budget and take innovative steps to bring sectors of the economy into the tax-net which were currently not being taxed and rendering a permanent revenue shortfall in the National Exchanger.