Lahore Chamber of Commerce and Industry endorse findings of Commission on black economy saying that implementation of recommendations would help save a much bigger amount collected by Federal Board of Revenue
Lahore, October 23, 2013 (PPI-OT): The Lahore Chamber of Commerce and Industry on Wednesday fully endorsed the findings of Commission on black economy saying that an early implementation of the recommendations would help save a much bigger amount what is being collected by the Federal Board of Revenue under the head of taxes and duties.
While commenting on the Commission report, the LCCI President Engineer Sohail Lashari said that the commission has rightly identified the sources of black economy within the tax regime that are incurring a loss to the tune of more than Rs 100 to 125 billion per annum to the exchequer.
“We are all praise for the Commission that has pinpointed tax evasion of billions of rupees through under invoicing, smuggling and other wrong tactics.”
The LCCI President said that the Lahore Chamber of Commerce and Industry had been calling for a long time now to plug the loopholes with a view that no income earned in the black economy should find shelter under any justification.
Engineer Sohail Lashari said that it was on record that the LCCI for the last 15 years had been inviting the attention of concerned authorities towards under-invoicing, mis-declaration in HS code, weight and volume to the tune of billions of rupees by the importers of goods from China. But it is very unfortunate that no concrete action has so far been taken to curb this menace.
He said that facts are also on record that there is huge difference of dollar 3.5 billion between China’s exports to Pakistan and Pakistan’s imports from China.
The LCCI President said that this phenomenon could be overcome through putting a complete ban on import through TT but the business community was unable to understand that why the FBR/SBP who always stress business through banking channels are silent on this particular subject for the last many years.
There is also a need to convert the “withholding tax regime” into a “minimum tax regime” without any possibility of refunds. The withholding tax except on salary becomes part of the price and is passed on to the ultimate user or consumer of goods. Why a consumer should pay the Income Tax of a businessman.
There is, therefore, no justification to allow refund of the same. All other exemptions should be withdrawn in the light of international/national studies which have proven that exemptions of tax on income did not encourage the documentation of economy at all.
The LCCI President said that all genuine businessmen are ready to pay income tax on the income earned through profitable businesses/industrial undertakings therefore all persons should be asked to file income tax returns and declare their income separately from each source whether exempt or otherwise. These measures, Engineer Sohail Lashari said would diminish the level of black economy and reduce the gaps between haves and have-nots.
The LCCI President, meanwhile, called for simplification of tax procedures that have become so complex that a simple businessman prefers to bribe a tax official instead of coming into the tax net and quite often it happens that he pays more money in bribe than the actual tax.
For the sake of promotion of industrialization in the country and to bring down the graph of unemployment, the government would have to simplify the tax procedures, the LCCI President concluded.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854