Staff Reporter
In the budget proposals released on Monday, the Association of Chartered Certified Accountants (ACCA) has urged the government to reduce tax rates to a single digit and ensure tax net broadening by adopting Data Analytics and Artificial Intelligence leveraging rich data sources at government’s disposal such as NADRA.
The proposals also talk about the importance of moving away from indirect taxes, calls for rationalisation, standardisation and automation of tax laws & administration to minimise harassment of tax payers.
The suggested structural reforms include harmonisation of federal and provincial tax laws, issuance of a single tax return, reduction in the discretionary powers of tax authorities, predicating appraisals of FBR functionaries on growth of business sectors under jurisdiction to instil a mindset of using tax as a means for GDP growth, incentivising tax payers to promote a tax culture, and establishing an independent appellate forum at Commissioner Appeals level.
The proposals also hope for the government to have a long-term strategy for import substitution, call for more incentives to local industry and favours heavy duties on non-essential imports and luxury items. Tax benefits to businesses pioneering UN’s SDGs have been recommended.
The negative growth in sectors such as mining and quarrying (-6.49%) and electric generation (-22.96%) is also highlighted for the government to take immediate action.
It’s stated that agriculture (recently growing at 2.77%) has the potential to reach up to 55% of the GDP from the current levels of around 24%. For this to happen, there’s a need for large landowners to be taxed at minimal rates, i.e. 7%. The revenue generated through this should be used to subsidise seeds, fertiliser, water, electricity, fuel, etc. for the small farmers.
Proper legislation and rationalisation can help improve the situation for mining and can also result in attracting FDI.
Focus on bringing down line losses, improving energy mix with clear plan for transition to renewables, as well as revising the existing costly agreements, can help reduce the negative trend for the electricity generation.
