Islamabad Chamber of Commerce & Industry (ICCI) has strongly opposed the two percent hike in Federal Excise Duty (FED) as proposed by Federal Board of Revenue and stressed upon the government to explore avenues for broadening tax base instead of putting more pressure on the existing taxpayers.

Zahid Maqbool, President ICCI said business community fully realizes the fact that government needs more financial resources to steer the country out of poverty quagmire as well as to bring economic stability and prosperity in the country. However, it doesn’t mean that to narrow down fiscal deficit, government should spend all its energies on exploiting the existing tax bases. Rather it should take measures to expand the tax base as there are opportunities to broaden the tax net by eliminating tax exemptions. He said that agriculture accounts for 22 per cent to GDP but contributes just 1 percent to tax revenue while this sector has the potential to generate sufficient chunk of tax revenue.

He said the business community is already in dire straits due to multiple factors while government measures like increasing 18 percent power tariff, 26 percent gas and 2 percent FED will push businessmen to the wall by exorbitantly increasing the cost of doing business. This situation will lead to closure of more industrial & manufacturing units, rendering thousands workers jobless and making our exportable products highly uncompetitive in international market. 

Zahid Maqbool said these are not ideal conditions to go on a spree of hiking tariffs and taxes when the country is facing many macro economic challenges. He said FDI has already posted a decline of 53 percent and exports have fallen by 9 percent in the first four months of current financial year and added that giving irrational hikes to utility tariffs and taxes will cause further decline in economic activities apart from discouraging the investment.

He said that government should create more conducive environment for business as smooth expansion of businesses will entail better tax collections & revenue for the government while the regressive taxes will reduce the purchasing power of the consumers ultimately negatively affecting the tax revenue. He further stressed that government should urgently implement austerity measures and cut all unnecessary and non-developmental expenditures to improve fiscal management & revenue utilization.