KCCI targets FBR and highlights major problems to government

KCCI targets FBR and highlights major problems to government

By: Communicators - Business Team (July 19, 2024)

In a recent meeting with Senate standing committee on commerce, members from Karachi Chamber of Commerce and Industry (KCCI) targeted Federal Board of Revenue (FBR) and rattled the meeting as tradesmen & manufacturers elaborated that the recent move to empower FBR will bleed the industry and businesses.

The committee presented a series of problems from high taxation and SRO 350 to soaring costs of production during a meeting at the KCCI. The committee was warned about the liquidity collapse the SRO 350 is set to cause to the Industry with tax office blocking huge refunds. An outcry was made over one percent turnover based fixed tax. On the fraud clause in the tax law, it was highlighted that it always made the taxpaying businessmen suffer, demanding the committee to step up its role in scraping it for good.

It was said that the investigation audit provision, will open a floodgate of corruption in the tax office, adding that higher electricity and gas tariffs have triggered closures of manufacturing units and businesses. It was lamented that the costlier energy is even not supplied firmly to the industry.

Criticizing the government for having no solutions to stem the ever growing circular debt of Independent Power Producers (IPPs), it was mentioned that the industry and businesses are likely to succumb to its burden. The committee was requested to stem the debt multiplication. Soaring costs of output from the higher taxation and energy tariffs are fast depriving the country's competitive edge on the global market, which is feared to ensue exports fall. Cross subsidy was also criticized, which the industry share as a financial burden to benefit domestic users and fertilizer sector.

The committee was told that that the mass retrenchment struck the industry across the country, leaving behind mass unemployment only because of the rising production costs. The committee was warned that the country might run to devastation if the government did not extend a helping hand.

Committee members acknowledged the concerns of the KCCI by saying that Karachi being the largest financial supporter to the national economy deserves more than what it demands to meet its needs. However, it was made clear that the ever troubling energy crisis had no quick fix as it requires a long-term plan and execution to provide the nation with an uninterrupted supply. Both, the poor and industrialist suffer alike from the energy scarcity. The country has to increase its tax to GDP ratio as only way to move forward to prosperity, which stands at 9 percent at present. With such a low taxation base, no country can grow.

It was hoped that smooth privatization of PIA will pave path for the private sector involvement in the country's economy, warning that any hurdles to bar the process will poise threats to the economic stability. KCCI was assured about solving their problems, seeking its proposals to remove all stumbling blocks to the economic and industrial growth. 

The committee however disagreed that all businesses & industries are grappled with the similar problems. Committee urged KCCI not to get panicked by FBR powers since the PM has just 'pinned' them and situation for business community will become better soon. It was claimed that the soaring inflation will not stay long to harm the taxpayers and businesses. IMF was also blamed for its conditions for the rising inflation and higher energy tariffs & taxation.

The committee sought support from the industry amid the gloomy economic situation, mentioning that the businesses have to bear the burnt for some time. It was feared the country may face a situation it saw in 1971 if economy completely collapsed and urged the KCCI for cooperation. Committee also urged KCCI to help the country pull out of the economic instability.