Fair and growth oriented tax policy in budget may overcome debt trap – President FPCCI

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Karachi: “A fair and growth-oriented tax policy and fundamental reforms in tax administration and drastic cut of unproductive expenses is the only path to achieve fiscal consolidation and overcome debt trap. We do not just have a plan but also consensus of all members to cooperate in its execution.” Mian Nasser Hyatt Maggo, President, Federation of Pakistan Chambers of Commerce & Industry said in his latest letter dated April 19, 2021 addressed to Prime Minister Islamic Republic of Pakistan.

He said, “If paradigms shift in tax policy and administration, as proposed by us, is implemented, Pakistan, with your untiring efforts and competent team, will soon be able to lead on the road to prosperity for all citizens. In the extraordinary circumstances of deadly third wave of Covid-19 Pandemic, we need to think out-of-box solution to achieve higher growth of 7-8 percent to ensure jobs for our youth bulge that is 60% of the total population. It is not possible unless we ensure higher growth leading to enhanced revenue and at the same time provide social security to all the citizens, especially the marginalized section of society.”

“We, therefore, propose that instead of continuation of conventional working by FBR, our detailed proposals sent to your good office are likely to exceed all the revenue targets of FBR agreed with International Monetary Fund, which may be considered by Tax Policy Wing, recently shifted to Finance Division. In this new set-up, FBR itself represents only as one of the stakeholders and not as policymaker. Its role should be confined to collection of taxes fairly, diligently and efficiently according to tax policy prepared by the government that means the Prime Minister and entire Cabinet and Money Bill passed by the National Assembly after considering recommendations of the Senate as envisaged under Proviso to Article 73(1) of the Constitution of Islamic Republic of Pakistan,” Mian Nasser Hyatt said.

The President FPCCI further stated that this apex body is prepared to discuss on the feedback by FBR on our proposals as directed by your esteemed office at any time to consolidate the agenda of reforms and growth. Our agenda of reform and growth is based on research and after marathon review by all members and many experts.

He referred the Letter No.949/M/SPM/2021 dated March 11, 2021 received from Prime Minister’s Office wherein Mr. Shaukat Tareen, was also made part of the Committee to consolidate recommendations within 10 days to be presented to the Prime Minister.

“In our view, FBR has no more power to frame tax policy that is rightly shifted to the Finance Division so that holistic view of economy is taken while devising a rational and growth oriented tax policy, rather than destroying growth with higher taxes having low yield, which is the main problem of the existing tax policy.”

“The instructions issued by Prime Minister are still assailed for implementation. It is now the best time to complete the process as both Finance and Revenue Division are under the newly-appointed respectable Federal Finance Minister Mr. Shaukat Tareen. In view of the short time left for preparation of Budget for 2021-2022, we earnestly request that direction given by your honour may kindly be expedited asking the Chairman of Federal Board of Revenue (FBR) to give feedback on our proposals”, Mian Nasser Hyatt Maggo, President, FPCCI concluded.