Tax reforms remain unsatisfactory: Yassar Sakhi Butt / Policy rate cut to prod growth: ICCI

  • November 29, 2011
President Islamabad Chamber of Commerce and Industry Yassar Sakhi Butt on Tuesday has said FBR derives most of revenue from indirect taxation which is a major burden on poor and obstacle in growth.

Masses as well as productive sectors continue to pay the price of unfair taxation, he said adding that unjust exemptions are keeping country underdeveloped as tax-to-GDP ratio remained unsatisfactory.

Speaking to business community, the ICCI President stressed that any tax reform process must deal with the core issues of equity and efficiency.

Yassar Sakhi Butt said that reliance on indirect taxes has fuelled the belief that our tax system is inequitable which has remained a major source of concern for international lenders.

He noted that our Gross Domestic Product forecast is at less than 3 per cent for the current year, due to load shedding, high cost of credit, reliance on domestic borrowing, eroding currency and law and order and other issues.

Low growth will have automatic negative impact on tax collections, he added.

Mr. Butt said that the productivity in Pakistan has dropped to 11 per cent during 1998-2008, worst in Asia, which underline the need for efficient, competitive and connected markets.

He said that banking spread and high cost of credit are issues choking growth that should be tackled immediately.

Yassar Sakhi Butt demanded of the government to consider allowing special interest rates for different industries which are not living on subsidies, he said.

Internationally competitive interest rate regime is a must for investments to bear fruit and for encouraging new investors, said Yassar Sakhi Butt.