ICCI Acting President slams FBR decision to resume income tax audit which will prove harmful for imp
- February 23, 2009
Shaban Khalid said certain elements of bureaucracy, who had been restricted from having any direct interaction with the business community as a result of implementation of the Universal Self Assessment Scheme, are conspiring to kill this ‘Best Practice(s)’ undertaken by the government. He said another proof of willful intervention by this segment is the fact that despite the (law of) computer balloting for tax audit purposes, which was not to exceed 5% random selection: instead over 20% audits have been called in the Rawalpindi/Islamabad region alone. He said given the current business environment in the country, where the business community is struggling for its mere existence, and every entrepreneur is fully consumed in struggling to keep its business alive, and barely meeting its day-to-day expenses, does not need the added pressure of the harassment of the tax-audit teams. Instead, at this time, the government should do everything possible in their means to keep these businesses afloat.
ICCI Acting President said where other foreign governments are announcing multi billion dollar rescue packages, our government is taking on initiatives that may hurt and in some cases kill these businesses. He said such decisions by the government at times of recession, will only hurt the government’s image in front of the business community, and will result in further worsening of the economic situation. He said instead, the government should make growth oriented policies for expanding the tax base by facilitating and encouraging all sectors of the economy. ICCI Acting President emphasized upon the government to take business community on board on all important decisions for achieving betters results. He said while making any economic decision, government should consult business community & other stakeholders and take them into confidence for creating a win-win situation for all.
He said in the past, harassment factor was sufficiently removed by minimizing interaction between business community and tax machinery which led to enhancement in tax revenue and government should keep this factor in mind before resuming income tax audit. He said Pakistan’s economy is passing through a difficult phase and plenty of industrial units have already closed down their operations due to unviable business conditions rendering thousands of people jobless. He said in such circumstances, government should take positive measures to support the business community for expansion and growth of business activities, which will ultimately lead to enhanced tax revenue. But he regretted that instead of encouraging businessmen, government has started taking measures which will make business environment tougher for them and will dampen the growth of economic activities in the country.
Shaban Khalid said Pakistan’s tax-to-GDP ratio is lowest in Asia except for Bangladesh and it is high time that government should make growth oriented policies for expanding tax base by facilitating and encouraging all sectors of the economy. However, he said that anti business measures like restarting income tax audit will not serve this cause, rather it will prove harmful for improving tax base. He stressed for the need of creating a healthy relationship between tax machinery and taxpayers so that taxpayers could feel encouraged to contribute positively towards the national exchequer and added that bureaucratic approaches of FBR will lead to further narrowing of tax base instead of improving it. Therefore, he called upon the government to desist from such measures and come up with better plans to create enabling environment for growth of business activities so that country could be able to cope with the present challenges.
ICCI Acting President said that unilateral decisions of the government have always badly damaged the economic activities and emphasized upon the government to take business community on board on all important decisions for achieving betters results. He said while making any economic decision, government should consult business community & other stakeholders and take them into confidence for creating a win-win situation for all. He said in the presence of self assessment income tax scheme, there was no need to conduct income tax audit. He said it must not be used as a tool to twist the arms of the business community which had been a practice in the past. Therefore, he suggested that income tax audit should not be carried out until the present crisis evaporates and economy gets back on normal track.