KARACHI: Declaring amnesty schemes hinder the entire taxation system, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has revealed that not even the wealthiest top five per cent of the country are paying their taxes.

Addressing the members of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Mr Langrial expressed optimism that the interest rate may be further reduced by 150-200 basis points soon. He opined that the country has no other breathing windows in sight and that promoting tax culture is the only viable solution, according to a press release of the FPCCI.

Mr Langrial said that not even the wealthiest top 5pc of the population is filing taxes and endorsed FPCCI’s demand for targeting tax evaders instead of those already paying taxes for decades.

Stresses amnesty schemes make taxation system dysfunctional

He also directed that a grade-19 FBR officer be made the focal person to address day-to-day issues raised by trade associations and communicate matters of urgency to him.

The FBR chairman said whatever taxes collected were spent on debt servicing. He admitted that recent years were painful for the economy and agreed that industries faced problems, but said the economy is showing signs of recovery.

FPCCI President Atif Ikram Sheikh said the federation and FBR have agreed to consult, collaborate and synergise on a comprehensive taxation reforms agenda.

“This is the only way forward for the economy of Pakistan as revenue generation provides the very basis of any country’s fiscal policies and development plan — nonetheless, the same needs to be done in a consultative, inclusive and pragmatic manner,” he remarked.

FPCCI Senior Vice President Saquib Fayyaz Magoon observed that FBR’s revenue target is Rs12.9 trillion, representing a 40 per cent year-on-year increase, while the economy is growing at only 2pc.

“This is a huge cause of concern for the business community and may result in new taxes, mini-budgets and taxing the already taxed even further,” he feared.

He maintained that the Finance Bill 2024-25 has significantly reduced the business community’s confidence in government’s policies due to the abrupt withdrawal of 1pc full and final liability for exporters and sales tax exemption on local supplies to registered exporters authorised under the export finance scheme.

He said the Tajir Dost Scheme was also implemented without consultation, and it has been revealed that it missed its revenue collection target by 99pc.

Published in Dawn, October 17th, 2024