Agriculturists and big farmers should be brought in the tax net, whereas levying withholding tax of 3.5 percent on traders and intermediaries of raw agriculture produce needs to be rationalized.

The President of Islamabad Chamber of Commerce & Industry, Mahfooz Elahi addressing a delegation of flour mills representatives said that traders/intermediaries of raw agriculture produce were exempted of withholding tax through S.R.O.586(1) 1991 of June 31,1991, now they have to pay 3.5 percent withholding tax vide S.R.O. 1161(1) 2010 dated 31-12-2010.

He was of the view that tax should be levied on the commission earned instead of levying it on the total trade.

The country was currently experiencing high inflation and impact of imposition of 3.5 percent tax on gross trade will be larger that would further increase the already soared prices of many agriculture products, hitting a common man directly, he maintained.

The President ICCI informed that most of the buying in the agriculture sector was done through Commission agents and irrational taxing would ultimately burden the end consumers.

He noted that through rationalization of tax, prices of flour, sugar, pulses, cotton fabrics, ghee and all other products of raw agriculture produce could be controlled for shooting up at higher rate otherwise many agri-products would escalate a great deal.

Elahi was of the view that for broadening tax base, government should take the businessmen on board instead of keeping politician in loop. He said that businessmen want to pay taxes, but government should take positive measures to bringing more people in the tax system.

He was of the view that while formulating budget proposals for 2011-12, FBR should initially hold meetings in the chambers and associations for getting proposals. Therefore, honest efforts and proper deliberation on each specific proposal should be held; with a concept of convincing or getting convinced regarding the budget proposal. The business community recommendation should be given due consideration for moving Pakistan on the roads to progress and economic development, President said. 

Elahi stressed that government should revisit its decisions and rationalize the imposition of any new taxes.