Published On: Fri, Apr 13th, 2018
Published in Category: Karachi

FPCCI asks government to reduce minimum tax rate

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Karachi: Federation of Pakistan Chambers of Commerce & Industry (FPCCI) in their Budgetary Proposals has urged the Federal Board of Revenue (FBR) to reduce the standard rate of minimum tax from 1.25% to 1%.

The proposals for budget were prepared under the Chairmanship of Senior Vice President FPCCI Syed Mazhar Ali Nasir, which suggets that enhance the threshold of turnover for charging of minimum turnover tax from Rs. 10 million to Rs. 50 million and exclude the companies having a gross loss position for the year from the purview of minimum tax by restoring the position of law prior to Finance Act 2016, allowing them to carry forward the minimum tax paid in the year of loss.

The SVP of FPCCI during a meeting elaborated that the minimum tax rate has intermittently changed over the years from 0.5% to 1% and vice verse but it has never increased beyond 1%.“It seems that the government instead of broadening of tax base and enhancing tax-to-GDP ratio is resorting to squeeze the minuscule number of existing taxpayers to achieve a higher tax collection target by increasing the tax rates. This runs counter-productive to the government efforts of bringing the new / potential taxpayers in the tax net as high tax rate provides incentive for its evasion and corruption”, he added.

FPCCI argued that the increase in exemption limit of turnover tax from Rs. 10 million to Rs. 50 million would help the companies in true declaration of turnover. Similarly, giving exemption from payment of minimum tax to the companies, who are in the gross loss situation, would provide them relief, he concluded.

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