KARACHI: The business community has welcomed appointment of Shabbar Zaidi as Chairman of the Federal Board of Revenue (FBR) hoping for business friendly taxation regime as Zaidi represents the private sector.[the_ad id=”31605″]In a statement, office bearers of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) congratulated Syed Shabbar Zaidi on his appointment as Chairman of the Federal Board of Revenue (FBR) for which he rightly deserved by virtue of his long and outstanding experience in the field of chartered accountancy and as such is well versed with the Pakistan’s tax law, key policy matters governing fiscal strategy, corporate regulation, foreign exchange regime and main ailments of its economy.
FBR officers, however, have expressed their serious concerns and reservations over the Government’s decision to appoint Syed Shabbar Zaidi as Chairman FBR. The appointment of a partner of chartered Accountant firm on the most important and sensitive position is risky and poses conflict of interest.
Being a senior partner of an accountancy firm A.F Ferguson & Co, Shabbar’s appointment raises serious doubts about his impartiality and sincerity with Premier Revenue Agency as he is pleading the cases of companies involving hundreds of billions of rupees as tax revenues.
Moreover his appointment has been made ignoring more than 10 senior most Inland Revenue Service and Pakistan Customs Service Officers serving in BS-22. This action has also been viewed as mistrust and no-confidence in more than 2000 officers working in both cadres of FBR.
Business leaders also hailed the decision of the government for bringing a professional person on such a vibrant post to steer the country out of the challenges being confronted by the FBR and hoped that the new incumbent would take long and short term measures to gradually enhance Tax-to-GDP ratio from 13% to its actual potential of 26% as the low ratio is mother of all economic ills such as higher tax rates ; tax evasion; thin tax-base; exponential increase in parallel economy; revenue shortfall etc.
FPCCI elaborated that out of 210 million population only 1.8 million returns were filed in 2018, which underscores the need to bring all the sectors of the economy in tax-net and wherever the income is generated be taxed with political will as at present manufacturing sector is overly burdened paying 62 percent of total taxes in comparison to its contribution (20.3%) in GDP whereas agriculture and service sectors share in tax payment is 1% and 37% respectively although their contribution to GDP is 19% and 60% respectively.
FPCCI proposed that trade bodies should be consulted in formulation of business friendly tax policy to ensure its smooth implementation.
FPCCI is confident that the existing cordial relations between the FPCCI and the FBR would be further strengthened for the benefit of both the stakeholders –FBR and trade & industry- and assured the FBR Chairman of their full support and co-operation for the promotion of tax culture in the country.