- ‘CNIC condition will be mandatory for business-to-business transactions and the govt will not reverse this decision at any cost’
ISLAMABAD: There was a misperception among traders about the CNIC condition and the government would soon introduce a fixed tax regime for small traders after which they would not be bound to record CNICs on sale of Rs50,000 and above, said Economic Affairs Minister Hammad Azhar, while addressing a Post-Budget Conference at Islamabad Chamber of Commerce and Industry on Thursday.
“However, CNIC condition would be mandatory for business-to-business transactions and the government would not reverse this decision at any cost,” he added
Hammad Azhar noted that the contribution of the retail sector in the country’s GDP was 20pc, but its contribution to tax was just 0.25pc.
He said 80-90pc retailers were not registered in the tax net, adding that the government was determined to bringing this sector into the tax system.
“The government has to make a 35pc increase in the tax revenue during FY2019-20,” he said and urged the business community to cooperate in this regard.
He blamed the wrong policies of the previous government that had led the country to deindustrialization, saying that the incumbent government would further strengthen the industry through the introduction of meaningful reforms.
“For this purpose, duty on import of industrial machinery would be reduced in the next budget,” he maintained.
The minister said 40pc tax revenue was collected at import stage and the government wanted to rationalise it. He said key policy rate was enhanced to control the level of inflation, adding that with the reduction in inflation, key interest rate would also be reduced.
Commenting on high electricity rates, he said that 40pc electricity was being produced through imported fuel and the government was working to generate energy through hydro and other indigenous sources that would bring down energy cost.
He said FBR was being automated so as to minimize the interface between taxpayers and tax collectors.
He recalled that the previous government had increased the circular debt to Rs453 billion in one year while the current government would reduce circular debt to zero in two years.
The minister assured that he would again visit ICCI along with the FBR chairman to address the tax issues of the business community.
Speaking on the occasion, ICCI President Ahmed Hassan Moughal said that tax rates were high in Pakistan due to which people were avoiding tax payment.
He urged that government to reduce tax rates and focus more on broadening tax base, a doing that would improve tax revenue.
He also emphasized the need to remove the reservations of traders on the CNIC condition.
Moughal urged the government to reduce the rate of sales tax to a single digit level in order to bring down the cost of doing business and inflation.
He said that the government should reduce duties on import of industrial machinery to boost industrialisation, employment, exports and tax revenue.
ICCI Senior Vice President Rafat Farid and office-bearers Zubair Ahmed Malik, Mian Akram Farid, Khalid Javed, Tariq Sadiq, Ch Waheedud Din also spoke on the occasion.