- Refund system should be rationalized and refund amount should be issued speedily
- Stress-free business community can help rule on shadow economy
- FBR targets should be realistic and achievable
Interview with Mr Shehzad Ahmed Malik – CEO, Shehzad Malik Management Consultants and Vice President ICMA Pakistan
- Shehzad Ahmed Malik is FCMA, CFC, M.A. Economics
- Authorized training employer ICAEW-Institute of Chartered Accountants of England & Wales, U.K.
- CEO-Shehzad Malik Management Consultants (Pvt) Ltd
- Vice President, ICMA Pakistan
- Executive Member Rawalpindi Chamber of Commerce
- Board Member of Different Companies
- Chairman Technical Support & Development Committee ICMAP
PAGE: What is your take on Single Sales Tax Portal?
Shehzad Ahmed Malik: After 18th amendments, provinces were allowed to collect tax at their own in their provincial jurisdiction. As a result every province started separate registration of sales tax. Now all the organizations which are operating in different provinces have to pay tax in their respective province and have to file monthly Sales Tax returns and quarterly withholding statements irrespective of volume of services. After that they have to face Tax Audits of department which is a cumbersome exercise.
Considering these issues of business community we as a professionals always advised the Ministry and FBR to introduce a Single Sales Tax Portal to ease the businessmen and promote the objective of Government and to ease the doing of business and increase the efficiency. Different Chambers of Commerce also suggested FBR to form a Single Sales Tax Portal which will enhance the number of filers vis-a-vis collection of tax will increase. Now FBR and different collection agencies of provinces have agreed on this agenda and are introducing Single Portal which will be a great achievement and laudable. In this way Single Tax rate will be applied and business community will feel comfortable in providing information to FBR.
PAGE: Pakistan‘s shadow economy, according to the International Monetary Fund estimate is 31.6% of its GDP. Your views on the documentation of the economy:
Shehzad Ahmed Malik: Yes, we can say that in Pakistan shadow economy is increasing day by day. The basic reason as per my views is due to difficult bureaucratic attitude of our departments and too much documentation at every step. Instead of facilitating community, our departments always create hurdles and takes too much time from registration to approval levels. Due to wastages of time and money, people like to remain outside the tax net and doing business and activities without any document. My suggestion is that system should be relaxed for the business community with minimum documentation and tax burden and allow them to flourish. In this way, economy will boost up and will generate employment for our youngsters which is dire need of time and for those who got unemployment after Covid-19.
PAGE: What is your take on the FBR tax collection during the current fiscal?
Shehzad Ahmed Malik: FBR is increasing their targets every year and to meet these targets, it is imposing too much pressure on taxpayers to increase the tax base. FBR has to meet its targets but its impact & impression on business community and tax payers also need to improve. FBR targets should be realistic and achievable and policies should be devised to increase tax circle with creating friendly environment. At the close of every year, FBR starts collection of tax by one way or other and its enforcement departments freeze the bank accounts and harass the tax payers without considering the basis and level of assessments done by officers which is totally a wrong way of collection and people fear FBR.
PAGE: Your perspective on income and sales tax refunds:
Shehzad Ahmed Malik: Refund from department is always very difficult task, especially in the cases of exporters, huge amount of tax is required to be refunded. Delays hamper the activities, funds are stuck up with FBR and shortage of funds slow down the business operation and sometimes businessmen are out of market due to this very reason. The enforcement department of FBR freezes the tax payers’ bank accounts for recoveries of tax liabilities to meet the targets. The business community needs the refundable amount which is retained by the department and long list of documentation is demanded at all levels. Refund system should be rationalized and refund amount should be issued speedily.