ICCI calls for drastic reforms in tax system to spur economic growth : AsiaNet-Pakistan

ICCI calls for drastic reforms in tax system to spur economic growth

September 6, 2019 | General Business News | Share:

Islamabad, September 06, 2019 (PPI-OT): The Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to bring drastic reforms in the taxation system to make it balanced, fair and simplified that was essential to spur the economic growth of the country as the current unbalanced, unfair, skewed and excessive taxation system was a main hurdle in enhancing tax revenue, promoting businesses and improving the overall economy.

Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce and Industry 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 ST was a regressive approach as it was putting excessive burden on the common man as well as on the businesses.

ICCI President said that though the standard rate of GST was 17%, but its actual incidence was over 40% in many cases after applicable customs duty, regulatory duty, mandatory value addition and advance income tax. He said that such oppressive indirect taxation along with ever rising costs of public utilities and daily use items have overburdened the masses making their life more miserable.

He urged that government should bring 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 Rs.1000 billion in 2007-08 to over Rs.3800 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, Islamabad Chamber of Commerce and Industry said that according to a new document prepared by the World Bank titled Pakistan Revenue Mobilisation Project, our 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 that government should focus 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.

For more information, contact:
Islamabad Chamber of Commerce and Industry (ICCI)
Chamber House, Aiwan-e-Sanat-o-Tijarat Road,
Mauve Area, G-8/1, Islamabad, Pakistan
Tel: +92-51-2250526, 2253145, 8432676
Fax: +92-51-2252950
Email: icci@brain.net.pk, info@icci.com.pk
Website: www.icci.com.pk

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Category: General Business News