2000-11-30

Experts for more taxation bodies

ISLAMABAD, April 25: The government should devolve revenue collection along with value-added taxes and Reformed General Sales Tax (RGST) to the provinces.

Calling for empowering the provinces and the local authorities over implementation and tax collection; speakers at a seminar here criticised the Federal Board of Revenue (FBR) for its failure to materialise the government policies on tax reforms.

They stressed creating multiple tax collection agencies instead of the single federally-administered authority.

The seminar, 'Macroeconomic challenges and the urgency of tax reform', was organised by the National Press Club.

Former adviser to the Ministry of Finance on RGST Dr Ehtashamuddin said the country should not continue to test the
efficiencies of FBR repeatedly.

"It is time to abolish the FBR and create new taxation bodies," he said and informed the participants about the Iranian model where even the federal government had two tax agencies – one for remote areas and the other for mega issues and large tax-paying areas. He said the government should implement taxes on agriculture and value-added taxes must be ensured through a constitutional amendment.

"Pakistan needs to reform its tax system to bring the economy out of the financial crunch," he said, adding: "The agenda must be decentralisation allowing the provinces to impose or reduce the taxes." Decentralisation of revenues is a prerequisite and its implementation must be the priority agenda of political authorities," he added.

Economist Dr Anjum Nasim said the financial assistance-providing institutions will renounce monetary assistance, aid and debt until Pakistan itself generated its resources, adding revenue generation system must be reviewed and faults scrutinised and eradicated.

Former commerce minister Dr Zubair Khan said devolution of the revenues to provinces was the need of time; however, the 18th amendment did not completely cover its devolution aspect.

He said RGST had become a political issue but the politics of RGST is that there is institutional disharmony, while there are some parliamentarians who object to the RGST because their voters do not have trust in the FBR and want distribution of resources at provincial and local level.

NFC member from Balochistan Dr Gulfaraz Ahmed said the federation should ensure security as peace and better law and order situation ensured prosperity.

"Revenue generation and revenue collection is essential and the political reform could ensure tax reforms," he added.

The FBR officials highlighted their achievements in improving the tax base and tax collections in the current fiscal year.

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