PIAF warns of high inflation on proposed taxes in budget 2024-25

ISLAMABAD   -   The Pakistan Industrial and Traders Associations Front (PIAF) has opposed the imposition of more taxes in the 2024-25 budget before its approval by the parliament, questioning how inflation can be maintained at 12 percent when more than 40 percent of revenue targets will be achieved from tax and non-tax measures and the elimination of tax exemptions.

The PIAF Chairman Faheemur Rehman Saigol said that the PIAF had taken all trade and industry associations on board for preparation of proposals for the upcoming budget. He said that efforts were made to give government a set of suggestions for upcoming budget to make it business-friendly. The PIAF chairman said that Pakistan’s inflation rate is the highest among all the South Asian nations. He said that the world is moving towards alternative sources of electricity generation but the Pakistan government’s policies are contrary to it.

Pakistan is the most frequent customer of the IMF and the governments often depend on borrowing from the lending arm and accepted stringent conditions, despite the fact that this institution is merciless money lender, which has always forced Pakistan to adopt bad policies like new taxes in the budget, rupee depreciation and massive increases in the electricity and gas tariffs. He said the business community understands that government was utilising its abilities to overcome economic challenges but at the same time the private sector considers itself duty-bound to point out the government hitches for speedy economic recovery. The PIAF chairman said that the FBR’s reforms initiatives are not bearing fruit, as the revenue collecting agency could increase the number of sales tax return filers mainly due to rise in the type of those filers, who haven’t paid any tax, implying that bad governance and weak tax management of the tax department still persist.

He emphasised the evident expectations drawn from the budget 2024-25. It highlighted the same measures which have been in discussion for the success of the IMF programme, he added. First of all, she indicated the prosperous increase in the revenue which was targeted at Rs9.4 trillion in the previous year, however, it has jumped to Rs12.97 trillion which is nearly Rs13 trillion for the current fiscal year. “This is a significant jump and is an over-ambitious target for the FBR to collect revenue,” she said. He urged the authorities to introduce new tax incentives and extend the period of existing ones for attracting new foreign direct investments in line with the potential of the country. With a view to wipe out corruption there needs to develop local software and Apps with simplified system in Urdu so that interaction of human resource should be reduced, he suggested. He suggested that taxes should be charged one time by any provincial or federal government, as provinces levy same kind of tax which the federal government has already imposed, escalating the cost of production and discouraging the registered manufacturers.

He called for harmonization of Sales Tax and Income Tax laws, getting rid of conflicting provisions, suggesting enhancing tax base by automation. He urged the government to improve tax structure so that business and investment could flourish in the country, as the existing tax structure discourages investment. He requested the government to focus on reducing tax rates and expanding tax base by bringing all exempted sectors into the tax net. He said that coordination between the government and the private sector was vital for economic growth, proposing the government to develop policies that could provide environment conducive to business in the country.

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