Tax specialists observe issues in tax system

ISLAMABAD: Complications and irritants in current tax processes must be overcome in order to fully use the country’s tax capacity.

According to former vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) MA Jabbar, taxation schemes are getting more nuanced with each budgetary exercise, likely due to the Federal Board of Revenue’s (FBR) decreased consultations with stakeholders.

He stated that the business sector is significantly overburdened to address its tax problems rather than participate in economic practices on the basis of a tax-predictable business climate to lead to improving socio-economic conditions when speaking at a seminar on the current tax regime.

FPCCI Vice President Hanif Lakhani, who was also present at the seminar, raised the issue of meeting collection goals in the face of slowing expansion, which has shifted the FBR’s emphasis from widening the tax base to existing registered persons.

Dr. Ikramul Haq, a tax specialist, claims to have invented a tax reform model that would usher in a paradigm change in Pakistan’s taxation system. The model would be in accordance with the incentives expected to stimulate economic development and enforcement.

Variable income tax, skewed and various excise taxes, customs and SROs culture, multiple revenue enforcement departments, and an ineffective appeal procedure were all addressed by Haq.

He agrees that the tax rate should be flat and that the tax base should be broad. He went on to state that taxpayers have to compete with a slew of revenue and non-revenue agencies, as well as a hostile atmosphere that makes it impossible to optimize the country’s tax capacity.

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