SLAMABAD, Aug 01 (APP):There was a misperception among traders about CNIC condition and government would soon introduce a fixed tax regime for small traders after which they would not be bound to record CNICs on sale of Rs.50,000 and above. However, CNIC condition would be mandatory for B2B transactions and government would not reverse this decision at any cost.
This was said by Muhammad Hammad Azhar, Federal Minister for Economic Affairs Division while addressing a Post-Budget Conference at Islamabad Chamber of Commerce and Industry.
Hammad Azhar said that contribution of retail sector in GDP was 20%, but its contribution to tax was just 0.25%.
He said 80-90 percent retailers were not registered in tax net and added that government was determined to bring this sector into the tax system.
He said that government has to make 35% increase in tax revenue during FY 2019-20 and urged that business community should cooperate in this effort.
He said that due to wrong policies of previous government, country experienced deindustrialization and added that current government would further strengthen the industry.
For this purpose, duty on import of industrial machinery would be reduced in next budget. He said 40% tax revenue was collected at import stage and government wanted to rationalize it. He said key policy rate was enhanced to control inflation and added that with the reduction in inflation, key interest rate would also be reduced. Commenting on high electricity rates, he said that 40% electricity was being produced through imported fuel and government was working to generate energy through hydro and other indigenous sources that would bring down energy cost.
He said FBR was being automated that would minimize interface between taxpayers and tax collectors.
He said that previous government increased circular debt to Rs.453 billion in one year while the current government would reduce circular debt to zero percent in 2 years.
He assured that he would again visit ICCI along with Chairman FBR to address the tax issues of business community.
Speaking at the occasion, Ahmed Hassan Moughal, President said that tax rates were high in Pakistan due to which people were avoiding tax payment.
He urged that government for reducing tax rates and focus on broadening tax base that would improve tax revenue.
He also emphasized the government to remove the reservations of traders on CNIC condition.
He urged the need for reducing sales tax rate to single digit level that would bring down the cost of doing business and inflation.
He said that government should reduce duties on import of industrial machinery to boost industrialization, employment, exports and tax revenue.
Rafat Farid Senior Vice President ICCI, Zubair Ahmed Malik, Mian Akram Farid, Khalid Javed, Tariq Sadiq, Ch. Waheed ud Din and others also spoke at the occasion and gave useful proposals for improving tax system and tax revenue.