Wednesday, May 5, 2010

ACCA Pakistan Pre-Budget Discuss: Stakeholders deliberate Federal Budget 2010/11

ACCA Pakistan Pre-Budget Discuss: Stakeholders deliberate Federal Budget 2010/11

ACCA Pakistan Pre-budget Discuss 'Supporting Fair Taxation' held on 4
May 2010 gave an opportunity to stakeholders to discuss the
composition of the upcoming Federal Budget. The panelist include Mr
Kashif Shabbir, President, Rawalpindi Chamber of Commerce and
Industry, Mr Zafar Ul Majeed, Member Strategic Planning and
Statistics, Federal Board of Revenue, Mr Sakib Sherani, Economic
Advisor, Ministry of Finance, Ms Ayla Majid, Director Business
Advisory Services, Khalid Majid Rehman & Co and Mr Salman Amin,
General Manager Audit, Oil and Gas Development Company Limited.

The discussion revolved around need for establishing a fair taxation
system by widening the tax base and nurturing a culture of voluntary
tax payment. Panelists were desirous of a tax system that encouraged
industrial growth and commented that tax incentives aimed at promoting
SMEs growth should be considered.

Participants felt that the agricultural tax reform needs an objective
and critical evaluation. Documentation of the agricultural sector
should be undertaken, support should be given to provincial
governments for an effective implementation of Agricultural Income Tax
on basis of income instead of acreage and any gain on the disposal of
agricultural land for non-agricultural purposes or change in status
from agricultural land to industrial or commercial land should be
subject to Capital Gains Tax by the provincial authorities in order to
enhance the perceived equity of the taxation system, Further
deliberations also suggested that awareness of tax benefits should be
created as it would nurture a culture of voluntary tax payments.

Value Added Tax (VAT) discussion revolved around getting the buy in of
relevant stakeholders and educating the business community about
whether VAT is a new tax or is replacement of General Sales Tax. If
VAT would result in a more documented economy then its benefits need
to be disseminated.

To attract foreign investment and to encourage the establishment of
regional headquarters of holding companies, a new provision of a
concessionary income tax rate, that is, a half rate, should be
introduced in the new federal budget.

Inclusion of tax incentives, along with carbon credits was also
suggested to make alternative energy projects financially viable,
encouraging investors to focus on such projects.

For information about ACCA Pakistan budget proposals please view ACCA
Pakistan Budget Proposals 2010-2011 through the following link: