RAWALPINDI: The Rawalpindi Chamber of Commerce and Industry (RCCI) has shown strong reservations on the federal and provincial budgets 2021-22.

Addressing a post-budget meeting at the Chamber House on Thursday, RCCI President Nasir Mirza said that section 203A authorises the tax officer to arrest a taxpayer. “This will increase harassment, bribery and blackmail,” he said, adding in general, both budgets reflect balance and growth. However, there were certain measures which have been proposed in the budget that sent a negative message to the business community.

He said the reduction in customs duty, withholding tax, capital gains tax and regulatory duty is welcome. The duty rate on poultry feed and raw materials has been reduced but on the other hand the sales tax rate has been increased from 10pc to 17pc.

The government has increased the income tax rate on the turnover of flour mills from 0.25pc to 1.25pc and this should be withdrawn immediately, he added.

Group leader and former president Sohail Altaf said that the business community has been badly affected due to Covid-19. Only by ending departmental intervention, commercial activities in the country can be boosted. Section 203 (A) of the Income Tax Ordinance also contradicts the government’s own policy which states that there should be minimal interference between taxpayers and the tax authority.

He said that the Ministry of Finance should consult stakeholders regarding installation of a point-of-sale (POS) system. Measures such as a fine of Rs1 million and sealing of the shop should be withdrawn, he said, adding that the government should take incentives and attractive measures to increase the tax net. You cannot collect taxes by threatening tax-payers, he added.

“Make the POS system attractive. The sales tax rate should be brought up to single digit,” he said, adding there was no allocation for the game changer Ring Road Project. Convener Tax Committee Shehzad Malik briefed participants of the meeting on federal and provincial budgets in detail. He said that e-hearing is being introduced and section 122 has been withdrawn.

However, we demand that the issuance of manual notices be ensured as many tax payers are still unaware of e-notices, he added.

Published in Dawn, June 18th, 2021