Pakistan can make a paradigm shift to have a business friendly taxation system by following Chinese taxation reforms: Shah Faisal
Lahore, April 02, 2015 (PPI-OT): China had undergone a splendorous Community development on the bases of its Taxation Reforms and Pakistan can make a paradigm shift to have a business friendly taxation system by following Chinese taxation reforms. It was stated by President Pak-China Joint Chamber of Commerce and Industry, Shah Faisal Afridi in press statement issued today. They made Taxation central to the economic development agenda and community development goals; he added and informed that China had employed Taxes as the principal means to transfer resources from private to public use.
Shah Faisal Afridi, urged the government to revamp the taxation system in line with Chinese taxation model so as to let the business and revenue grow simultaneously in Pakistan. He regretted that the prevailing taxation system is a source of harassment for the business community and a way of corruption for taxation officials.
Referring to the Chinese model of taxation system, President PCJCCI told “China, the socialist state has fulfilled the needs of society from cradle to grave. Child care, education, job placement, housing, subsistence, health care, and elder care are largely provided and administered through state-owned enterprises, said Afridi. He told that particularly the reform of value-added tax had boosted China’s service sector and change its position as the “world’s factory. He said that VAT reform was designed to replace business tax in manufacturing sector to protect the tax revenue of local governments.
Mr. Afridi said that Pakistan needs basic reforms in the taxation system at the pattern of China that will prove to be an end to ‘coercive’ tactics by tax collectors which hinder businesses’ growth in Pakistan. Such reforms would pave the way for boosting the tax base in the country, he said and regarded tax evasion by the country’s elite as the main reason behind Pakistan’s low tax-to-GDP ratio. “It is an embarrassment that we continue to beg others to come to our help when the solution is available within our own borders”, he added.
He maintained that the majority of our legislature belongs to the class which does not pay itself any tax. They want ‘others’ to pay the tax and ‘others’ are not selected on the basis of their ability to pay tax but on their lack of inability to resist unfair taxes. This is dilemma of all the nations where elite is corrupt and have little stake in their home countries, he added.
Afridi suggested that the Reforms to improve our taxation system need to be focused on human resources, business process, corruption and information management. An effective revenue organization must be comprised of trained and dedicated persons with integrity, transparent processes, a comprehensive information system, and taxpayer education. While on the other hand property and commercial surveys, if conducted frequently can identify individuals and businesses that are outside the tax net and can also limit the scope of tax evasion.
He asserted that like China Pakistan should also set some realistic community development goals based on Tax revenue rather than on Foreign aid. He said there is a need to create an optimal balance between a tax regime that is business and investment friendly, while at the same time leveraging enough revenue for public service delivery (which, in turn, makes economies more attractive to investors).
However, the President PCJCCI proposed to constitute a business community driven tax reform committee to bring a good tax system in place at the pattern of Chinese Tax Mode, which should be fair, adequate, simple, transparent, and administratively easy to adopt and comply.
For more information, contact:
Wardah Ali Gohar
Pakistan China Joint Chamber of Commerce and Industry (PCJCCI)
Mega Tower, 309 – 6th Floor,
Main Boulevard, Gulberg II,
Lahore, Punjab – Pakistan
Tel: +92-42-35777460-02, +92-42-37032203, +92-42-35874353