FPCCI Seeks Sales Tax Cut to 5% From 17%

Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has demanded the government to cut sales tax to 5% from 17% to end tax-related problems.

In an exclusive interview with News360, Mirza Abdul Rehman, FPCCI Head of Coordination Committee, stressed the need of promoting industrial and trade activities after lockdown.

He added the current situation demands that the industry and business activities must be let run.

Abdul Rehman demanded that harassment in the name of tax audit should end.

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“A person who files Rs 1 million income tax in a year and submits Rs 1.1 million tax next year, 10% more than previous year, should not be put in tax audit and it should be considered final tax”, the official said.

He said that FPCCI has sent the recommendation to the ministry of industries and production in this regard.

Abdul Rehman said that the practice would enable industrialists and traders to focus on their businesses instead of making rounds to the income tax offices.

FPCCI official said it would also expedite business activities that would consequently generate employment.

He demanded the inclusion of a member from the chamber in the committee of the Federal Board of Revenue (FBR) to address tax-related grievances and complaints.

How business activities can be promoted?

FPCCI official told they have recommended to assign hoteling the status of an industry.

He added a slash of 5% income tax on hotels and marriage halls has been suggested as well.

Abdul Rehman said the hoteling industry possessed huge potential to generate quick employment in a short time. He said the hotel industry was under a heavy load of taxes which increase evasion.

The official said the tax reduction would stop the practice and increase revenue.

Tax filing should be eased

Replying to a question, Abdul Rehman said that assets and other financial details of taxpayers should be registered through National Database & Registration Authority (NADRA).

He said that the tax submission process should be streamlined into one with introduction of one window system.

The official suggested that there should be a restriction on registration of vehicles, property, and assets within 3 months and it should be incentivized with exemptions.

How tax grievances could be resolved?

Abdul Rehman told industrialists and traders do not have representation in the forum made for redressal of tax-related complaints. All industrialists want to pay taxes, he said.

FPCCI official said that the method of tax submission was quite complex and alleged that lower staff harass the businessmen.

He demanded to smooth up the tax filing process with removal of all impediments.

Complications in sales tax

Abdul Rehman said that it was an uphill task for getting registered for sales tax and most people don’t understand the process.

Commenting on 90% tax on vehicles’ spare parts, FPCCI official said when the people purchased raw material from an entity non-registered under sales tax and then sell it to another non-registered entity, the levy keeps adding at every step and reaches around 93%.

Abdul Rehman told they apprised Federal Minister for Industries and Production Khusro Bakhtyar and Adviser to Prime Minister of Pakistan for Commerce and Investment Abdul Razak Dawood about it.

He suggested slashing sales tax to 5% from 17% to end all complications.