Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has emphasized that, while FPCCI supports the efforts to increase tax-to-GDP ratio, it has to be achieved through broadening of tax base and simplification of the taxation system – rather than further squeezing the already taxed. The only pragmatic approach to achieve tax-to-GDP ratio of 15 percent in the next 5 years is to add 1.5 to 2 million new taxpayers in the tax-net, he added.
Mr. Atif Ikram Sheikh maintained that the tax and FBR reforms should not be attempted in a consultation-less manner as these kinds of efforts have been grossly unsuccessful multiple times in the past; and, the successive governments resorted to the regressive and anti-business measures of further increasing the taxes on existing filers.
Mr. Atif Ikram Sheikh stressed a three-pronged strategy to broaden the tax base: (i) end-to-end digitalization of the taxation system to bring transparency & fairness (ii) FBR reforms in consultation with the business community in light of the ground realities (iii) an end to maladministration & harassment of trade & industry at the hands of taxation machinery.
FPCCI Chief stated that the business, industry and trade community understands the need for the country to enter into a new, expanded and longer-term IMF program; which will entail, as per past practice, imposition of more taxes – however, FPCCI wants to make it clear that last few years have been unprecedentedly difficult for trade and industry due to COVID, floods, cost of doing business, exchange rate volatility; and, incremental rounds of increase in electricity, gas and petroleum prices.
Mr. Atif Ikram Sheikh apprised that the core inflation has come down to 12.8 percent and headline inflation recorded at 20.7 percent in the month of March 2024; which is the lowest in 22 months; and, the trajectory is categorically showing a downward trend for the months to come. Therefore, it becomes imperative to reduce the key policy rate at the earliest; and, a regionally-competitive export finance scheme (EFS) and long-term financing facility (LTFF) should be offered to exporters, he added.
