Overseas Investors Chamber of Commerce and Industries endorsed flat taxation, asked for more evidence and gradual implementation
In a seminar organized by PRIME Institute in Karachi, tax policy experts and business stakeholders gathered and deliberated on the newly launched study which proposes a breakthrough paradigm to increase tax revenues by simplifying the tax code and lowering tax rate and increasing tax base.
The study “Towards Flat, Low-rate, Broad and Predictable Taxes” is authored by renowned advocates and academics Dr. Ikramul Haq and Huzaima Bukhari.
At the seminar, the authors were joined by Nasim Beg CEO Arif Habib Consultancy, Abdul Aleem Secretary General OICCI and Ali Salman Executive Director PRIME Institute. All speakers agreed that this new paradigm is a positive step towards economic growth and prosperity.
Huzaima Bukhari stated that by simply lowering taxes and eliminating the complexities within the system, national internal revenues could be raised to Rs. 5 trillion annually. She proposed a 10% tax on individuals, 20% on businesses, 5% single stage sales tax, and a 5% single slab customs duty.
Dr. Ikram shared that Pakistanis are a heavily taxed nation, paying 39% on services and 14% adjustable income tax deducted at source. He revealed that 89% of the entire sales tax is collected through only a hundred companies.
Nasim Beg highlighted that the dimension of equity should not be forgotten. He proposed that wealth and inheritance tax need to be brought back into the tax system and that the tax base should include everyone who are not eligible for BISP. He stressed that taxing on income is taxing productivity, hence the need to tax wealth and inheritance instead.
Former President Karachi Chambers, Majyd Aziz stressed on the need for collaboration between think tanks and the corporate sector of the country. He demanded that the government should facilitate Pakistani cement manufacturers to take part in the CPEC projects.
Executive Director Ali Salman said that taxpayers of Pakistan do not get the fair share in decision making and the agenda is driven by international donors who work with the federal government.
Endorsing flat taxation proposal in principle, the OICCI Secretary General Abdul Aleem cautioned on the need of gradual process and demonstrating the effectiveness of the proposal at the pilot level. He stated that OICCI has already proposed a 5% single state tax to the government, which is in unison with the proposal of PRIME Institute.
The seminar was attended by representatives from businesses, tax experts and government. It was supported by the Friedrich Naumann Foundation for Freedom.