Icci demands fixed tax regime, single-digit GST in next budget

The islamabad Chamber of Commerce & industry (icci) has called upon the government to introduce a fixed tax regime for traders in the upcoming budget, end the condition of computerised national identity card (CNIC) for them on sales, and bring down general sales tax (GST) to a single digit level. icci President Sardar Yasir ilyas Khan, in a statement on Saturday, said that the retail sector is making around 20 percent contribution to gross domestic product (GDP), and introducing a fixed tax regime for it would be a great initiative to broaden the tax base of the country, besides making significant improvement in tax-to-gdp ratio. He said that the best option for the government to increase tax revenue is to avoid putting more tax burden on existing taxpayers and focus on broadening the tax base with low tax rates. He said that high tax rates in Pakistan are a major hurdle in promoting tax culture and bringing more people into the tax net as high tax rates always encourage tax evasion. Therefore, the government should focus on rationalisation of taxes to make them affordable for taxpayers that would be helpful in promoting tax compliance across the country. He said that tax on rental income is up to 37 percent in Pakistan due to which the business community is also facing great problems as they have to pay high rents of shops and this factor is giving rise to inflation as well. He stressed that the government in the coming budget should make a significant cut in tax on rental income in order to reduce cost of doing business and attract more local and foreign investment in the country. icci Senior vice President Fatma Azim and vp Abdul Rehman Khan said that 17 percent GST in Pakistan is a major cause of high production cost and high inflation. They said that the GST is 5 percent in Canada, Taiwan and UAE, 7 percent in Singapore, 8 percent in Sri lanka, 9 percent in iran and 10 percent in vietnam, which shows that the people and businesses in Pakistan are paying a very high GST.