ISLAMABAD, Sep 6 (APP):The Islamabad Chamber of Commerce and Industry (ICCI) has urged the government for introducing reforms in taxation system to make it balanced, fair and simplified that was essential to spur the economic growth of the country.
Ahmed Hassan Moughal, President ICCI in a statement on Friday, said that 28 percent increase in domestic tax collection was recorded during the first two months of the current fiscal year, which was encouraging.
However, he said that Pakistan was mostly depending on sales tax for tax revenue, which contributed to over 38 percent to the total tax collection in 2017-18.
But, he said that the major reliance of Sales Tax was a regressive approach as it was putting excessive burden on the common man as well as on the businesses.
The ICCI President said that though the standard rate of GST was 17 percent, but its actual incidence was over 40 percent in many cases after applicable customs duty, regulatory duty, mandatory value addition and advance income tax.
He said that indirect taxation along with rising costs of public utilities and daily use items have overburdened the masses making their life more miserable.
He urged the government for bringing urgent reforms in taxation system to make it people and business friendly so that taxpayers could feel motivation to pay due tax and contribute in the economic development of the country. He said that total tax collection has improved by over 280 percent during the last decade as it has increased from over Rs1000 billion in 2007-08 to over Rs3800 billion in 2017-18, but significant increase could be made in tax revenue by making revolutionary reforms in it.
Rafat Farid, Senior Vice President and Iftikhar Anwar Sethi, Vice President ICCI said that according to a new document prepared by the World Bank titled Pakistan Revenue Mobilization Project, the country’s tax revenue could reach 26 per cent of GDP, if tax compliance was raised to 75 per cent. It showed that the gap between actual and potential tax collection was 50 per cent, which could be plugged by developing a fair taxation system.
They said that taxation was a multifaceted instrument which, if used sensibly, could help the country attain its economic and social goals. They urged the government for focusing on developing a reformed and balanced taxation system that should facilitate the growth of business activities and finance the important public expenditures including health, education and social welfare of the common man.