ICAP proposes budgetary measures to promote growth

ISLAMABAD, Apr 5 (APP):The Institute of Chartered Accountants of Pakistan (ICAP) Thursday proposed the government a number of taxation measures to make the upcoming budget for the fiscal year 2018-19 growth and development oriented.
“It is taxation which has to be conform itself with the business and not business with taxation,” said Chairman Committee on Fiscal Laws and Member ICAP, Ashfaq Tola while, addressing a press conference here.
He recommended that policy decisions were required to broaden the tax bases to enhance resources, besides plugging tax leakages. He said that all the sectors of economy must be brought within the tax-net, irrespective of the source of earning.
He was of the view that the low tax-to-GDP ratio in Pakistan was main impediment in the economic development, which has compelled the government to take short-term tax measures, adding that the share of agriculture sector to GDP was 19.5 percent while its tax share was mere 1 percent.
Similarly, the share of manufacturing sector to GDP was 13.5 percent while its share in taxes was 5.8 percent. Similarly, the retail and sales tax sector which contributes 18.5 percent to GDP had only 1 percent share in taxes while the Services sector was contributing 59.6 percent to GDP and its share in taxes was 37 percent.
Tola, however lauded the government for introducing many reforms for broadening the taxbase during the past years, however added that much more was needed to be done.
Talking about the tax harmonization of Sales Tax on Services, Tola said that a uniform service tax law should be agreed upon by all the provinces and the federal government for implementation in their respective jurisdictions by respective tax authorities.
He also highlighted the importance of institutional rebuilding of tax administration to strengthen the independent policy-making role of Federal Board of Revenue (FBR), modernizing the tax system and formulating independent, fair and transparent tax policies.
He informed the media persons that ICAP had set up 6 committees to prepare budget proposals of different sectors, adding that the book that contains all these proposals have also been given to Prime Minister, Advisor to Prime Minister on Finance and Advisor to Prime Minister on Revenues for consideration.
He said that ICAP had set up a committee to sit with FBR from April 12 to 15 and deliberate on these proposals for incorporation in the federal budget.
He said that the proposals were made to facilitate taxpayers, saying that these represent wishes of people.
He also highlighted the importance of enhancing the budget for education up to 5-6 percent of GDP to promote quality education in the country.