Revision of many tax proposals on the cards

Saturday, June 20, 2009

ISLAMABAD: Considerable revision of the budgetary tax proposals is reported to be on the cards with no major economic policy maker in the country willing to take ownership of the budget document as was presented in the National Assembly on June 13, sources told Business Recorder. A closed-door meeting was held in Finance Ministry on Friday.

Participants included Advisor to Prime Minister on Finance Shaukat Tarin, Hafeez Pasha, Saquib Sherani, a member of the panel of economists, Finance Secretary, top officials of Federal Board of Revenue (FBR), representatives of chambers-from Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Sultan Chawla, KCCI President Anjum Nisar, Presidents of RCCI, ICCI, LCCI, PCCI, SCCI and FCCI-, Zubair Motiwala, Zahir Khaliq, AQ Khalil and Javed Bilwani.

The business community had given a 24-hour ultimatum for rectification of anomalies in the aftermath of the budget announcement. "We really do not know who took the controversial decisions in the budget for the business community. We will rectify these decisions through amendments in the Finance Act," an insider quoted Tarin, Hafiz Pasha, Saqib Shirani and Finance Secretary as saying in the meeting.

The participants, who spoke with Business Recorder after the meeting, expressed satisfaction over the progress made during the deliberations, but were of the view that 'there is many a slip between the cup and the lip'. "We cannot become complacent till the government makes a formal announcement in the Assembly through amendment in Finance Act," said one of the chambers' President.

Insiders were of the view that as Tarin had replaced Irfan Nadeem with Sohail Ahmed in FBR, there was a revolt-like situation in the tax collecting agency, which was the main reason for the anomalies in the budget. "The government did not even incorporate agreed proposals in the budget, which indicates that something was wrong at the decision making level," said another president of a chamber.

According to Zubair Motiwala, the government did not agree to undo two decisions-reduction in tax on import stage from the increased level of 4 percent to 2 percent, and 0.5 percent turnover tax. Another major demand, which has been agreed to by the government, was that now tax officers would audit once in a calendar year, rather than the practice of previous years. The government also agreed to rationalise withholding tax on exports. In the budget, withholding tax was increased to one percent from 0.75 percent.


(BRecorder)