KARACHI, March 20: Central Board of Revenue chairman M. Abdullah Yusuf has categorically denied the reports that the government is going to re-impose sales tax on five zero-rated export sectors in the next annual budget.

“The government has no such an intention. The entire chain of five export- oriented industries including textiles, leather, surgical, sports goods and carpets will continue to enjoy the exemption,” he said while addressing the members of SITE Association of Industry during his visit to the SAI office, says a press release here on Monday.

He said this step was taken to minimize fraud as the amounts of refunds used to exceed the collection and also to improve the cash-flow situation of the manufacturers, and to avoid the legacy of cumbersome system of refunds and rebates.

In addition to that, he said, the government was going to facilitate manufacturing further for providing enough space to industrial units to become more productive, he said.

Chairman CBR appreciated the role of business community in improving the economy.

Referring to the attitude of tax collecting agencies, he said that the business community would now find them friendlier as there had been an attitude change.

SAI chairman Ameen Bandukda in his welcome address said that despite all efforts made by the CBR in the resent past, the number of total taxpayers had not been able to go beyond 1.5 million, who were being squeezed for the past so many years.

He said that income wherever generated and from whatever source should be taxed. When there was a level-playing field, people would feel proud of paying their taxes. The tax system did not appear to be equitable and socially just to all segments.

He said there should be at least three million taxpayers in the country and the low number had meant that the government had increasingly been relying on indirect taxes to raise revenues to meet its expenditures. “The incidence of indirect tax falls on the poor segment of our society and fuels inflation,” he added.

He said the government needed to further reduce the direct tax rates to increase the tax base.

He suggested that every new commercial entity whether it is a retail store or a doctor’s clinic or any workshop should first take an NTN before being allowed to get any utility connection.

The CBR chairman said the government was reviewing the entire taxation system and looking for the areas in need of rationalization.

He agreed that his first priority should be to increase the tax base otherwise the existing 1.5 million taxpayers in a population of 150 million would remain under pressure.

He urged the business community to come forward and help the government in increasing the tax base.

Talking about the inflation and its repercussions on the general public, Mr Yusuf attributed it to substantial increase in prices of petroleum products, food items and rental value. It was among one of the major problems facing the government today. While admitting that inflation had gone over 11 per cent and it had now come down to just over 8 per cent.

“I would like to see inflation coming down to the level of 5pc,” he remarked.

FPCCI help sought: Meanwhile, CBR chairman M. Abdullah Yousuf has asked the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to set up a task force to help CBR in expanding the tax net.

Talking to a delegation of the FPCCI led by its president Ch. Muhammad Saeed here on Monday, he said that the proposed task force should coordinate with the CBR so that the whole chain of wholesalers, agents, transporters, retailers etc., working for major manufacturing groups were being brought under the tax net one by one, says FPCCI statement.

The CBR chief said that for combating the under-invoicing of imported goods an agreement had been signed with Chinese government to exchange import/export data electronically.

He said that negotiations were being held with the UAE Customs authorities for exchange of trade data in view of the complaints of mis-declaration of goods.

Under an agreement with US authorities, he added, scanning equipment would be installed at Port Qasim whereby goods within containers coming to the port for loading onto the ships could be examined.

This facility would curb the menace of mis-declaration of goods and obviate the necessity of checking of the containers at the landing ports.

Earlier, Ch Muhammad Saeed said there were apprehensions that the CBR in its efforts to increase tax-GDP-ratio would put the tax burden on the industry and called for a level-playing field to all sectors of the economy.

He pointed out agriculture sector contributed 24 per cent to the GDP but its contribution to tax was nil and there were other sectors as well which were not paying taxes.

He assured that the FPCCI was willing to extend maximum cooperation in enhancing the tax collection target.—APP