Zero ratings for the export sector demanded: Mian Zahid Hussain

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Chairman of National Business Group of FPCCI, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance and former provincial minister Mian Zahid Hussain said national development and tax compliance could not be ensured unless the tax rate is reduced.

Industrialization and employment generation required reduced cost of doing business which will also lure new investments for which the resumption of the zero-rating facility is also required, he said.

Mian Zahid Hussain said that the tax burden on the industry must be reduced while the liability of tax on sectors paying one to two percent tax should be increased to strike a balance.

Talking to the business community, the veteran business leader said that masses accept high tax in developed countries to get service in return. In contrast, taxpayers get nothing in return in underdeveloped countries; therefore, tax evasion is preferred.

He noted that lack of confidence between the government and masses, corruption and wastage of tax money of fancy mega projects also discourage taxpayers from complying.

Rich countries depend on direct taxes while indirect taxes are at lowest contrary to the developing nations where governments depend on indirect taxes like 17 percent GST in Pakistan, he observed.  

He said that some finance ministers and chiefs of FBR tried to reduce indirect taxes in the past but end up increasing taxes due to ever-increasing expanses of the government.

The undue tax burden on the industrial sector is resulting in shifting of the industry to other countries and pushing industrialists to other industries which enjoy little ration of taxes. Therefore, the share of industry in GDP is declining, which should be noticed, he said.

Mian Zahid Hussain said that Pakistan could not attract investment in industrial sector unless the taxes are reduced.

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