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Business Recorder

Published Date: Apr 26, 2017

Qasir says govt. eying on enhancing direct taxes

ISLAMABAD: Qaiser Ahmed Shaikh, Chairman, National Assembly’s Standing Committee on Finance and Revenue, has said that the federal government was aimed to enhance direct taxes in the country so that the common man should not be burdened further under various kinds of taxes. He said that the government wanted to harmonize the tax regime, however, the provinces, especially that were lesser developed should be free to come up with their independent incentivized tax systems. He said this while speaking at pre-budget consultative meeting on ‘Provincial tax reforms in Pakistan, challenges and way forward’ held at Sustainable Development Policy Institute here on Tuesday. 

The meeting was participated by a large number of experts and representatives from various public as well private sector entities related to trade, business and economy. They highlighted various aspects of federal and provincial tax regimes and suggested that corrective measures were needed to improve the harmonization between federal and provincial tax regimes. 

The chairman of NA’s Standing Committee on Finance and Revenue added further that government had taken a number of measures to improve tax regime and to eliminate double taxation. However, he said, still there was a lot of room to correct things, especially related to tax collection and to simplify the tax filing system further. He said, at present, the provinces were not tapping the huge potential of property tax fully as the tax that was being levied on property was far lesser than its actual value. 

Qaiser Ahmad Shaikh said that the government had broadened the consultation to solicit budget recommendations and besides parliamentarians from all the political parties, other stakeholders including business community, academia and researchers were also made part of this consultation. 

Zulfiqar Hussain, senior official from federal Board of Revenue (RBR) on the occasion said that the federal taxation authority was working with provinces to create more harmonized tax system whereas the efforts were being made at every level to safeguard the interest of the consumers. He said the FBR was open to receive and review all the recommendations from business community and other stakeholders. 

Earlier, Dr Vaqar Ahmad, Deputy Executive Director SDPI, said that the report of the Tax Reform Commission in 2015 suggested that the tax coordination issues between federation and provinces could prevent any relief to the people and it could lead towards enhanced cost of doing business. He said that SDPI research has also shown that all provinces have different tax rates and most try to tax the same shrinking sources of income and wealth-thus leading to additional burden on already taxed sectors. 

In order to harmonize the taxation system across provinces, Dr Vaqar said, “All provincial governments should take measures to consolidate the large number of sub-national taxes, reduce compliance costs through merger of provincial revenue authorities and introduce a unified tax return and central deposit of payments”. Likewise, inter-governmental tax committee for dispute resolution and to integrate audit capacities of provincial tax authorities, he concluded. 

Hammad Siddiqui, Country Director, Center for International Private Enterprise, while sharing his views said that the consultation on provincial tax systems was important to bring about constructive reforms. The representatives from various bodies related to trade and industry also shared their views on the occasion and suggested that tax regime should be reformed to facilitate legitimate tax payers in the country.—PR