Rawalpindi: The Rawalpindi Chamber of Commerce and Industry (RCCI) has expressed deep concern over the government’s proposed money bill to abolish income tax exemption. More than 80 exemption/rebates are being abolished under the Finance Amendment Bill 2021. These include company/firm listings in the stock market, non-profit organizations, discounts/tax credits on setting up refineries, special economic zones (SEZs) being setup under the China-Pakistan Economic Corridor and the Independent Power Producers (IPPs), plant and machinery installation of new machinery, real estate investment trust, film industry, sports board and IT Export services.
In a statement, Chamber President Mohammad Nasir Mirza expressed strong reservations over the proposed bill, saying the country’s economy was going through difficult challenges due to the COVID-19 epidemic. The COVID has hit the business community hardest. At such a time, introduction of a tax-exempt money bill has ringed alarm bells among the business community. He said that the Chamber has always demanded that stakeholders be consulted in economic policy making. The IMF’s terms should be seen in the context of the ground realities.
He said that actually tax exemption has led to an increase in investment in many sectors in Pakistan especially in IT, Real Estate Investment Trust and CPEC Industrial Zones and the government has received many times more tax. Abolishing tax exemptions will stop investment in these sectors in the country as a result of which the FBR’s annual tax targets will not be met, he added.
Governments around the world have announced special incentives, tax breaks and financial support packages in the wake of the Corona epidemic.
He said that due to the Corona epidemic, business activities were slowing down and a full recovery would take a long time.
Group leader Sohail Altaf said the FBR had failed to increase the new taxpayers. Instead of looking for new taxpayers, the government is putting more burden on existing taxpayers. The government should show prudence and wisdom. He said that on the one hand, the FBR has collected Rs 13 billion more than its tax targets till February, ie a total of Rs 2911 billion. On the other hand, tax exemptions are being abolished. He stressed that there is uncertainty at the moment and such measures could harm the country’s economy. The proposed money bill should be withdrawn.