A pre-budget discussion session was held at Islamabad Chamber of Commerce & Industry (ICCI)  to hammer out budget proposals on  tax reforms. The session was chaired by Mian Muhammad Ramzan, Chairman, ICCI Sub-Committee on Taxation while Zahid Maqbool, President  ICCI, Munawar Mughal, Chairman Founder Group, Zubair Ahmed Malik, former President ICCI and many other businessmen participated and provided valuable input for tax reforms.

Businessmen said that entry of smuggled goods into Pakistan from neighboring countries was hurting the business of local manufacturers, discouraging documentation of business activities and depriving the government of more tax revenue.

They proposed that government should reduce duty and taxes on all smuggled-prone items in the next budget so that legal imports could be encouraged, which will also improve the tax revenue of the government.

They stressed that Afghan Transit Trade should be strictly regulated to ensure supply of only those items to Afghanistan that are genuinely needed there. This will help curbing the duty free smuggling of many items back to Pakistan.

They termed the current rate of turnover tax on Flour Mills as irrational and demanded reduction of it as was done in the case of cigarettes. They also called for reducing withholding tax and final tax regime to provide some relief to end consumers from heavy load of indirect taxes.
Zahid Maqbool showed concern over the fact that as per budget blueprint of 2010-11, government has focused on enhancing current taxes instead of broadening tax base, which will put more pressure on existing taxpayers.  He called upon the government to develop a proper strategy for broadening the tax net instead of enhancing existing taxes.

He said broadening tax base is also critical for developing a fair and equitable tax system and to encourage greater honesty in payment of taxes. He said ratio of direct tax should be improved to save mitigate the burden indirect taxes which add more miseries to people.
He said government should launch a comprehensive awareness campaign to promote proper tax culture in the country. For this purpose, religious scholars and Khateebs of Mosques should be involved so that they could educate the people that paying tax to state is as obligatory as performing other religious obligations.

Businessmen said that to improve tax-to-GDP ratio, government should offer some incentives to high taxpayers such as issuing them tax cards like Gold & Silver cards. Moreover, taxpayers should be treated respectfully and preferably at every forum including airports, government hospitals and government organizations etc. so that people could feel some motivation to come into tax net.