Prosperous tax culture in necessary for ma sustainable economic growth, said
He reiterated that it is imperative that the country's tax base be broadened. He explained that it is not sustainable for a country to collect more than three-quarters of revenue from indirect taxes. Ways should be found to increase the direct taxes. He said that
He emphasized introducing structural reforms to get out of the economic vicious cycle. In
He informed that the Institute has suggested to the Government for forming a Policy Board which is to be entrusted to review the fiscal policies in the context of its impact on the economy. The prime objective of the Policy Board would be to debate and formulate national tax policy in consultation with the stakeholders. The Board may comprise of in broad spectrum, the eminent economists and other stakeholders like FPCCI, Tax Bar Associations, trade bodies,
He emphasized that the perception of the tax burden is shared by every citizen of the country in an equitable way must be the foremost objective to increase the tax base. The fixed tax regime and the final tax regime were introduced decades ago as ad-hoc measure to sustain tax collection, but to compensate economic mismanagement and defective collection system they had to be evolved into an important collection tool. These regimes, coupled with the frequently deliberated 'amnesty schemes' creates a negative perception about the whole taxation system in the eyes of the honest tax payer. The long term objective of any tax policy must be to remove this perception at the earliest.
The law provides tax immunity to foreign remittances coming into the country however he stressed that such immunity should be available only to a family member sending foreign remittances, or for remittances sent for investment in plant & machinery in order to avoid such immunity provisions in unscrupulous hands leading to large scale tax evasion.
The corporate sector which is the most documented segment of the economy has been neglected due to inadvertent measures taken by the Government in order to cater annual budget targets. Furthermore the manufacturing sector which contributes to GDP the most carries a greater burden of tax. The Service and the Agriculture sectors are still not fully documented hence their contribution to the national exchequer is extremely low.
He said that tax audit is the core function of any revenue authority and should receive the maximum focus and attention. Audit function should be completely separated from rest of the
There is urgent need of capacity building of the field formation officers with high level of technical skills and specialized training to undertake the challenges of tax audit. An effective audit will act as major deterrent against under reporting, frauds and tax evasion. The capacity of auditor in the present form is inadequate and cannot equip them with the necessary skill required to carryout the tax audit. Therefore, the Government of
The tax on services through provincial laws is creating complications for the genuine tax payers. The Institute strongly stresses for complete harmony among the federal and provincial sales tax laws so relieve the tax payers from undue hassles and unwarranted litigation with tax authorities.
He assured the media representatives' full support of the Institute to the national cause of revamping and overhauling the taxation system. He urged the media to create awareness on socio-economic and national issues and said that media can play an important role in bringing the country out of the crisis. The representatives thanked the
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