KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Mohammed Tariq Yousuf, while vociferously slamming the Federal Board of Revenue (FBR) for its discriminatory attitude towards the rest of the country other than Punjab, demanded similar treatment for Section 7E (tax on deemed income basis) of the Income Tax Ordinance 2001 at par with Punjab where it has recently been withdrawn for both filers & non-filers but this controversial section stands applicable in rest of Pakistan.
“It is purely a case of sheer discrimination towards the business community of Karachi only as it is a well-known fact that majority of the real estate activities take place in this city so the business community of Karachi only would suffer the most because of the complicated Section 7E concerning the sale or transfer of immovable property”, he said, adding that the Quetta Chamber of Commerce has also obtained a stay order from the High Court of Baluchistan which has restrained FBR from taking any coercive measures on the strengthen of Section 7E of the Income Tax Ordinance 2001.
He mentioned that the FBR, in response to Lahore High Court’s judgement, immediately issued a Circular No. 3 of 2023-24 dated August 15, 2023 wherein the FBR categorically stated that Section 7E will not apply in cases falling within the jurisdiction of LHC, hence, the conditions pertaining to obtaining certificate from the Commissioner outlined in Circular No.1 of 2023-24 dated July 21, 2023 will not apply in Punjab.
He said that it was not the first time as such discriminatory attitude has continued from time to time with the business community of Karachi which has also remained deprived of cheaper RLNG at the rate of US$9 per MMBtu which was being provided to the businesses in Punjab only. “Another discrimination is also being meted out to Karachi as the Valuation Chart for the entire country is based on price of the plot but for Karachi, it also includes the constructed area which is a huge discrimination. Karachiites feel that all this is being deliberately done to deprive Karachi of future investments.”
He said, “It seems that the government and its institutions like FBR want the business community of Karachi to come out on streets to widely protest against FBR’s discriminatory attitude towards Karachi which, if happens, would send a very negative message and would prove disastrous for the economy as no foreign investors would look forward to Karachi for investment purposes because of all such anti-business moves which are purely focused on completely destroying the businesses activities in Karachi.”
Keeping in view the massive and matchless contribution of more than 68 percent revenue to the national exchequer, President KCCI hoped that the Chairman FBR would pay special attention to this issue and immediately order complete withdrawal of Section 7E which would be widely welcomed by the entire business community of not just Karachi and Sindh but also all other provinces of the country.
“Moreover, Chairman FBR must also take concrete steps to put an end to all types discriminations in the taxation laws which have been devised to squeeze the business community of Karachi only whereas the rest of Pakistan enjoys total immunity”, he opined, adding that the entire taxation structure needs reforms and it has to be simplified to such an extent where maximum number of individuals are encouraged to get into the tax-net instead of staying away by looking at the hardships being faced by the loyal taxpayers.
Tariq Yousuf recalled that during the last visit of FBR Chairman to KCCI, Amjad Zubair Tiwana was all for out-of-court settlement and in this regard, an FBR-KCCI joint committee was formed to look into Sales Tax Refunds and other taxation affairs, but now it seems that the FBR wants to push Karachi’s business community to go to court for relief. He hoped that Chairman FBR would take steps at the earliest in the same spirit exhibited during visit to KCCI.