ICCI calls for slashing 35 percent tax on rental income to 15 percent
- June 24, 2020
Tahir Abbasi, Senior Vice President, Islamabad Chamber of Commerce and
Industry said that before the budget, the business community has been demanding of
the government to reduce the maximum tax on rental income from 35 percent to 15
percent as it has not only increased the hardships of the business community but also
encouraged tax evasion, but the government has not paid any heed to this issue in
budget. He strongly demanded that during the review of the budget, the maximum rate
of tax on rental income should be reduced from 35% to 15%, which would alleviate the
hardships of the business community, boost business activities and improve the tax
revenue of the government as well.
Tahir Abbasi said that the government has increased the withholding tax on engineering
services industry from 3% to 8% in the budget, which would affect business activities of
this industry and give rise to unemployment. He urged that government should
withdraw the hike in WHT on engineering services industry to save this sector from
further troubles. He said that engineering services industry was an important source of
job creation in the country while this industry was also playing a positive role in
developing skilled and professional talent to go abroad for work and increase
remittances for Pakistan. However, more than 166% hike in WHT on this industry in one
go would significantly affect its business, increase unemployment and cast a negative
impact on the economy. He emphasized that government should reconsider the
increase in WHT on engineering services to protect it from further losses.
ICCI Vice President Saif-ur-Rehman Khan said that the government under Section 56AB
of Sales Tax Act has provided FBR real-time access to information and databases of
various organizations including NADRA, FIA, Bureau of Immigration and power and gas
companies. However, he said that if this access was misused, it would create
unnecessary harassment among the taxpayers. He, therefore, urged that government
should develop a proper check and balance system and a comprehensive mechanism
should be put in place to ensure that real-time access to FBR to the information and
databases of various organizations would never be used to harass the taxpayers.