Tuesday, April 16, 2024

It is how Government extorts Businesses under the guise of Taxes and Fees

The Government of the whole world and also Pakistan needs taxes for delivering services to its citizens, and while doing so, the easiest and quickest prey are the businesses because they usually regularly file returns, and are compliant and also can be more wrested while in the tax net.

The broadening of the tax net is quite difficult for taxmen, and it’s an easy method that is always preferred as if they just don’t get paid for or to do hard things. Whenever the Government of the country needs more money, the effective genius solution is to just slap the additional duties and the taxes on those who are already paying the tax.

This same approach is also applied while charging the regulatory fees. Legally the fee is not considered as tax and the charged in lieu of some certain services that are provided by the regulators and the authorities like licensing rights, and facilitation, etc., just have to commensurate as with the costs of the services that are provided by this authority.

Businesses off-course have to make more money and also profits; otherwise, it is not possible for them to exist for long. And businesses particularly has structured the corporates, engines of the growth for any of the economy. They bring competitiveness, innovation, new advanced technology, and most significantly create more jobs for educated youth and something for our country’s needs.

The telecom sector is working with the highest tax rates of around 40% in the world and is no exception as to the worst treatments often faced by all the businesses at the hands of the Government. On top of this, the operators of the company are charged exorbitant (high prices) right of way (ROW) costs, and regulatory fees, etc.; they got disgraced and treated like dirt by the arrogant officials and authorities.

The telecom industry has been frustrated has been raising this issue on various sites and platforms, including the Prime Minister’s Task Force that is on IT & Telecom for quite some time.

FBR has also said that the only conventional industry with its material input and its output is the “industry”. The high tech data and the telecom have nothing to do with the industry, and hence the operators cannot adjust the income tax paid at the time of imports for the plant and machinery, as the board claims. And when FBR does not value the decision by the Federal Cabinet declaring that the Telecome as an industry after around 16 years of reminders, then what’s the purpose here of such a declaration?

The ignorant and rigid mindset rampantly just prevails in officials as they usually think that any due right given to businesses in the country under the law undermines the government interests. However, FBR needs to justify the value of more than Rs. Fifty billion of annual taxes that were collected from the public’s pockets in the name of around “12.5% of Advance Tax on the internet and telecom and this can never be adjusted more than 90% of consumers because their annual income does not exceed limits of taxable.

Educated youngsters of the country need high-quality education and a meaningful job in Pakistan that can only be provided by modern businesses. It is high time for the Government to purge this colonial mindset. Taxes and also fees have to be brought down in the country, and Stone Age regulations must be modernized. It is a real chance that the country Pakistan is looking forward to as of the current Government.

Syed Ali Abbas
Syed Ali Abbashttps://startuppakistan.com.pk
General Manager at Startup Pakistan

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