The Federal Board of Revenue (FBR) is prioritising reduction in the cost of doing business for budget 2021-22 by getting rid of excessive taxation and slashing compliance cost, said FBR Member Inland Revenue Operations Muhammad Ashfaq Ahmad.
Speaking to businessmen during his visit to the Karachi Chamber of Commerce and Industry (KCCI) on Friday, he said this move would set businesses free so that they have minimum interaction with tax authorities and focus on expanding business and industrial activities.
“FBR is a 30-35% stakeholder in whatever is earned in shape of sales tax, income tax or withholding tax, hence it is in the authority’s best interest to give businesses a favourable environment and slash their cost,” he said.
He added that the FBR receives thousands of budget proposals every year but hardly gets time to go through all of them.
Keeping this in view, he requested the Karachi Chamber and all other business chambers to immediately present budget proposals to the technical committee formed by the finance minister, get them refined and forward practical recommendations to the FBR.
He emphasised that the FBR would make all-out efforts to implement maximum number of practical recommendations.
According to figures released by the State Bank of Pakistan, the offtake of working capital has declined due to improved performance of FASTER system in processing sales tax refund claims quickly.
“We are competing with the State Bank of Pakistan in a positive contest,” he said. “We dispatch refunds so that businessmen do not have to borrow working capital from banks as it jacks up their cost.”
He revealed that the FASTER system was running with zero balance and consumed on average 40-50 hours to process a refund claim.
“It is working with 95.5% efficiency which indicates that the sales tax refund system is outstanding,” he said.
“The old refund claims remain stuck but instructions have been issued in this regard and taxpayers should request field formations to get their old claims processed, which will be done on priority through the FASTER system,” he said.
Meanwhile, the Refund Grievance Committees in different cities of the country also review and resolve old refund claims in consultation with the business community at the local level and dispatch them on priority, he added.
Referring to tax litigation, he said that a massive amount of revenue remained blocked for the FBR and if it succeeds in recovering just 20% of it, then revenue target would be met and the country would no longer have to approach the IMF to request a cut in it.
Speaking on the occasion, Businessmen Group Chairman Zubair Motiwala urged the FBR to disclose its priorities for budget measures so that the KCCI and other trade associations could forward precise budget proposals in accordance with them.
Appreciating the performance of FASTER system, he urged the FBR to also pay attention to the small and medium enterprises whose income tax refunds remained stuck.
“Small businesses are facing serious cash flow problems and they do not have access to banking channels,” he said while expressing concern.
“In this regard, the FBR should start by fixing some amount like Rs50,000 or Rs100,000 for settling income tax refund claims, which will bring some relief to small businessmen.”