Business
LCCI president urges PM to facilitate taxpayers amidst economic challenges
A copy of the letter has also been sent to Federal Minister for Finance and Revenue and Chairman Federal Board of Revenue.
Lahore: President of the Lahore Chamber of Commerce and Industry Kashif Anwar, has penned a comprehensive letter to Prime Minister Mian Muhammad Shahbaz Sharif to highlight critical issues faced by taxpayers and urge for facilitation to alleviate additional tax burden.
The copy of the letter was also sent to Federal Minister for Finance and Revenue and Chairman Federal Board of Revenue.
President LCCI said that recent amendments introduced by the Federal Board of Revenue (FBR) through SRO 350(I)/2024, dated 7th March 2024 which perceived as disproportionately impacting tax-compliant entities and hindering private sector expansion.
He said that the electronic return filing requires Commissioner approval through the Integrated Risk Information System (IRIS) if i-sales surpass five times the capital, ii-non submission of balance sheet within thiry days. It will create undue hardships for the compliant taxpayers and force them to move out of the tax net.
The SRO also stated that the individuals, association members, or directors of single-shareholder companies would be mandated to undergo biometric verification at a National Database and Registration Authority (NADRA) e-Sahulat Centre during the month of July every year. The taxpayer who fails to comply with this requirement would not be able to file his electronic return without the prior approval of Commissioner.
He said that Under the provisions of the same SRO, failure on the part of the seller to submit a return by the stipulated deadline would result in adjustments being made to the buyer's return. The Integrated Risk Information System (IRIS) would subsequently eliminate invoices from the non-compliant seller and correspondingly deduct input tax credit from the buyer's return. Consequently, Kashif anwar said that the buyer's tax liability would be recalculated based on the remaining invoices, thereby imposing an unwarranted financial burden and augmenting their sales tax obligations.
He also pointed out the SRO 1842(I)/2023 dated 21.12.2023 which says that a retailer whose deductible withholding tax under Section 236H of the Income Tax Ordinance, 2001 exceeds Rs. 100,000/- during the last 12 months is liable to integrate with FBR's Point of Sale (POS) system. This has restricted the sales of a retailer to Rs 20 million for POS integration.
LCCI is of the view that keeping in consideration the effects of devaluation and inflation, this limit of withholding tax for retailers should not be less than Rs 500,000/- to run their businesses smoothly. It is worth mentioning that the condition of POS integration for 1,000 sq feet covered area has been withdrawn in the previous Budget for retailers. Furthermore, single shop retailers having one NTN should be exempted from POS integration.
While acknowledging governmental efforts to promote documentation and broaden the tax base, Kashif Anwar underscores the unintended consequences of current policies, which risk squeezing compliant taxpayers and stifling economic activity.
He urges for collaborative efforts between stakeholders and governmental bodies to devise inclusive policies that incentivize tax compliance while fostering business expansion.
LCCI President urged the Prime Minister's leadership, envisioning a complete turnaround of Pakistan's economy through proactive measures that prioritize taxpayer facilitation and economic revitalization. He said that there is a dire need to make policies for those who are not in the tax net.
Ends/