ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to withdraw increase in taxes imposed on flour mills through budget 2021-22 as it would make flour more expensive.

ICCI Vice President Abdul Rehman Khan, while chairing a meeting of the business community here on Wednesday said that the government has increased the income tax rate on the turnover of flour mills from 0.25pc to 1.25pc, which is 400pc increase in one-go and would cause sharp rise in flour prices.

He said the government should immediately withdraw the unjustified increase in the income tax rate to save people from more troubles.

Mr Khan said the sales tax on bran was abolished four years ago which was welcomed by the flour millers but in the current budget a sales tax of 17pc had been imposed on bran which will also give rise to inflation.

“Flour is a basic need of the people and the high cost of flour has a direct impact on the life of the common man,” he said.

Finance Minister Shaukat Tareen should immediately withdraw the increase in the income tax rate for flour mills and the imposition of sales tax on bran in the budget.

The ICCI Vice President further said that wheat was not available in the market despite the government’s claim of a bumper crop of wheat while about 600,000 tons of wheat has been imported.

He emphasised that the government should focus on controlling the hoarding and stop seizing of wheat loaded trucks along the way, otherwise the flour will become more expensive, which cannot be blamed on the flour mills.

Abdul Rehman Khan said that if this situation continued, the price of a 20-kg bag of flour would go up to Rs1200, which would make bread more expensive in the market.

He stressed that to save the people from further hardships and difficulties, the government should immediately restore the income tax rate on the turnover of flour mills to 0.25pc and also withdraw 17pc sales tax on bran.

Meanwhile, the Rawalpindi Chamber of Commerce and Industry (RCCI) has expressed serious concerns over the inclusion of Section 203 (A) of the Income Tax Ordinance under the Finance Bill.

In a statement, RCCI President Mohammad Nasir Mirza said that the Income Tax Officer has been given the power to arrest the taxpayer. It should be withdrawn immediately.

He said that the RCCI has always insisted that tax payers be respected, not harassed in the name of audit, registration and tax collection.

“Commercial activities in the country can only be boosted if the departmental intervention was brought to an end. Section 203 (A) of the Income Tax Ordinance also contradicts the government’s own policy which states that there should be minimal contact between the taxpayers and the tax authority,” said Nasir Mirza, a representative of traders.

He said that the government should take incentives and attractive measures to increase the tax net. You can’t collect taxes by threatening taxpayers, he added.

Expressing reservations over the third party audit, the traders’ representative said that the proposal of third party audit by the FBR to end harassment was under consideration. Audit procedures and details should be worked out in consultation with stakeholders.

Published in Dawn, June 17th, 2021