June 01, 2016
President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister Mian Zahid Hussain on Wednesday said a separate revenue authority for small and micro enterprises can expand tax base to push revenue collection to unprecedented heights.
Establishment of a new revenue authority for small traders has become imperative as the recently announced tax amnesty scheme has remained counterproductive while withholding tax on bank transactions has not gone down well with the trading community, he said.
Mian Zahid Hussain said that continued reliance on withholding tax, tax on bank transactions and proposed expansion in the WHT for easy revenue will further discouraging documentation.
Banking transaction taxes hasn’t been implemented in many countries because they do not tax incomes or consumption. This tax is not only inequitable but it choke growth and promote informality therefore it must be abolished.
Moreover, he said, small and medium enterprises are functioning in an entirely different market mechanism which is not in harmony with the existing system of the FBR.
Some tax rules and regulations are not compatible with the business practises of small and micro enterprises and it is impractical for them to comply with the current laws which promote evasion, he added.
It is very difficult to make FBR rules acceptable to the trading community therefore a separate revenue authority should be established which can help boost revenue collection by 100 percent ending dependence of country on loans, he added.
He said that the new authority should be assigned additional responsibility of capacity building of these entrepreneurs through training and financing and for the purpose SMEDA, SME banks and other concerned institutions may also be incorporated into it.
The new establishment will be a milestone in widening the tax net and will bring these important segments to take part in economic growth of the country and also pave way for the welfare of the important segments.