SECTION 203A IS NOT ACCEPTABE BY BUSINESSMEN COMMUNITY FPCCI President announces budget anomalies in press conference

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Karachi: “We are against imposition of Section 203A through new budget relating to arrest a businessman under the tax law.” President FPCCI Mian Nasser Hyatt Maggo announced on Wednesday while addressing a post budget press conference.

Nasser said he has proposed to delete this provision or form a committee of FPCCI and Member legal FBR to decide about the criminal proceedings. Vice President Nasir Khan and former president Zakaria Usman also addressed on the occasion.

FPCCI Chief said the western taxation system being copied by bureaucracy is not workable in our society. The new budget is for elite class not for general people. There are 383 billion rupees additional taxes imposed in this budget that would overburden the economy. There is no uniform tax system in the country, if you reduce extra duties the growth would increase. Third party audit is not workable while the FTO was already dealing with such disputes and cases successfully, he said.

Nasser Maggo stated that this new section has been amended to include trial by special judge. This will be exercised by Asstt. Commissioner on his personal whim whether to arrest a person or not. The taxpayers will be subject to this harassment whereas those who were outside the tax net will continue to enjoy without fear of any discretionary exercise by the officials.

He said that arbitration and prosecution systems must be separated immediately for which we have already filed a request to Supreme Court to take suo motto action. Two years back the FBR had imposed CNIC condition but had not registered any new taxpayer on the basis of CNIC. This has proved to be a redundant and counterproductive exercise. The FPCCI believes that initially the FBR should target to register all industrial and commercial units who were not under the tax net; through data base of electricity connections etc. There are still 3.6 million power users who are not registered tax payers, he said.

He added that the budget 2021-22 does not reflect our suggested model of taxation. Maggo said retailer is a buyer from wholesaler in small quantities; he cannot produce original goods declaration. Therefore, bringing him under umbrella of smuggling is not justified. It is mere harassment for millions of retailers. This is the duty of law enforcing agencies that are responsible to stop smuggling at the borders. Then control the movement from borders to different cities, storage and sale by wholesalers to stop smuggling. Retailers should not be held responsible for the act which is beyond their scope, the President FPCCI said.

By referring withdrawal of exemption in schedule 6 & 8 Maggo said this withdrawal has resulted imposition of sales tax to large number of items which will cause price hike affecting common man and inflation. There were number of items where reduced sales tax rates were applicable from one to ten percent but now standard rate of 17% has been imposed. Sales tax on import of plant and machinery has been increased to 17% which was previously subject to reduced rate of sales tax. If you wish to promote industrialization sales tax on plant and machinery should not be imposed, he suggested.

Blank exemptions from levy of FED to industrial units located in FATA and PATA irrespective of quantities consumed in those locations will disturb the equilibrium of all operating units in rest of the country, Maggo said. He further said that business community seeks clarification as to why all benefits are given to public limited companies while the entire operating units are treated differently with higher taxation and denied level playing field.