Government is planning to introduce value-added tax (VAT) from 1st July 2010, but traders throughout the country are agitating against this mode of taxation and government should take traders into confidence by removing all their reservations on VAT before its implementation. 

This was said by Zahid Maqbool, President, Islamabad Chamber of Commerce & Industry while chairing a meeting of ICCI Sub Committee on Taxation. He said healthy relationship between taxpayers and tax collectors is the key for optimum revenue generation from taxes and VAT should not create rift between these stakeholders.

He said that government should first launch a comprehensive awareness campaign about VAT using all mediums of communication as majority of business community and common man are still unaware about the basic principles of this tax. He said without doing proper groundwork, implementation of VAT might not yield the desired results.

Zahid Maqbool said that VAT requires lot of documentation work while all traders are not well literate nor all can afford the services of tax advisors. Therefore, this factor should also be kept in mind while going for VAT so that traders may not face undue problems in payment of this tax.

Committee members said that government should also take into consideration all the problems of businessmen like energy crisis, highest ever utilities tariffs, high interest rate, rising inflation, increasing cost of doing business, security challenges etc. to make sure that enforcement of VAT may not lead to further decline in tax revenue.

They were of the view that the present difficult circumstances are not suitable for introduction of VAT. Therefore, either its enforcement should be deferred for some period or it should be should be implemented it gradually giving sufficient time to taxpayers to become used to it.