Simplification of tax system should be focused for upcoming Budget-Yassar Sakhi Butt

  • April 03, 2012
Government should take additional measures for simplification of tax system and plug revenue leakages against the target of Rs1,952 billion for ongoing fiscal year.

Yassar Sakhi Butt, President Islamabad Chamber of Commerce and Industry (ICCI) made these remarks, while commenting upon relatively low rate of increase in tax revenue. He said that FBR has collected only 57 percent in first eight months of current fiscal year and required more than 800 billion in remaining months with a huge average collection on per month basis.

He was of the view that consistent growth in tax revenue collection would ultimately lead to sustainable reduction in fiscal deficit. He further said that upcoming budget should be growth-oriented and focused on simplification of tax system.

ICCI President emphasized on exploiting the true tax potential of the country and said that fair and equitable tax policies were essential for revamping tax collection system and pulling the economy out of economic crisis. He stressed that Government should devise a comprehensive strategy to broaden the tax base and rationalize tax rates so that people should happily contribute towards paying taxes.

He expressed concern over the missed tax collection target of Rs1,588 billion in the last fiscal year that shown a deficit of Rs30 billion and said that proactive measures should be introduced to plug the leakages and improve the refund system in tax departments.

ICCI president said that business community and foreign investors’ confidence depends upon tax machineries, therefore, tax system should be transparent and the tax collection officers should have no discretionary powers which undermine the fair play.

He cited the examples of Malaysia, India, Thailand, Turkey, and Sweden, who experienced rapid growth and rising tax ratios, while in Pakistan tax collection rose just in line with the economic growth. He stressed upon the Government to increase tax collection to 13 to 15 percent of GDP in the next five years for the development and safeguard macroeconomic stability.