Muzammil Hussain Sabri, President Islamabad Chamber of Commerce and Industry has shown concerns over the reported shortfall of Rs.126 billion in revenue collection during the first half of fiscal year 2014-15 and called upon the government to bring drastic reforms in taxation system to improve the tax revenue of the country in order to achieve better economic progress. He was presiding over a meeting of ICCI Sub-Committee on Taxation. 

 

He said that the government had reportedly set revenue collection target of Rs.1285 billion for July-Dec 2014, but it could manage to collect only Rs.1159 billion during this period despite the fact that government introduced heavy taxation measures of Rs.231 billion in the annual budget. In these circumstances, achieving annual tax collection target of Rs.2.81 trillion for the current financial year seems to be an uphill task.

 

He said the main reason of low tax revenue collection is that there are many loopholes and flaws in our taxation system. He said a taxpayer in Pakistan has to spend 560 hours per year in preparing, filing and paying income taxes as compared to only 227 hours in East Asia. Similarly 54 percent of tariff lines have different customs tariff rates for different importers and there are multiple sales tax rates from 5, 7, 17, 19.5 and 22 percent while most other countries have only one and two rates of this tax. It shows that our tax system is very complicated and needs to be simplified to improve tax compliance.

 

Muhammad Shakeel Munir, Senior Vice President ICCI said the only way to improve the tax revenue up to potential is to bring drastic reforms in taxation system. He said government should merge various tax rates to keep tax slabs at minimum possible levels and eliminate all tax exemptions & duty concessions in order to broaden the tax net instead of putting more burden on the existing taxpayers. 

 

Muhammad Ashfaq Chatha, Vice President ICCI stressed that government should also reduce reliance on taxes on international trade and take strong measures to expand the tax base as well as bring transparency in tax system. He said our current flawed tax policy tends to impede the economic growth and there was a dire need of developing a reformed, transparent and fair taxation system that would go a long way in making our tax structure progressive & growth oriented and contribute effectively in boosting the economic development of the country.