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Businessmen oppose hike in federal excise duty

ISLAMABAD: The businessmen on Friday opposed the two percent hike in Federal Excise Duty (FED) as proposed by Federal Board of Revenue and stressed upon the government to explore avenues for broadening tax base instead of putting more pressure on the existing taxpayers.

President Islamabad Chamber of Commerce and Industry (ICCI), Zahid Maqbool, said in a meeting today that business community fully realised the fact that government needed more financial resources to steer the country out of poverty and bring economic stability in the country. However, it could not mean that government should spend all its energies on exploiting the existing tax bases. Rather it should take measures to expand the tax base as there were opportunities to broaden the tax net by eliminating tax exemptions. He said agriculture accounts for 22 percent of the GDP but contributes just 1 percent to tax revenue while this sector has the potential to generate sufficient chunk of tax revenue. He said the business community was already in dire straits due to multiple factors while government measures like increasing 18 percent power tariff, 26 percent gas tariff and 2 percent FED would push businessmen to the wall by exorbitantly increasing the cost of doing business. This situation would lead to closure of more industrial and manufacturing units, rendering thousands workers jobless and making our exportable products highly uncompetitive in international market.

The ICCI chief said these were not ideal conditions to go on a spree of hiking tariffs and taxes when the country was confronting several macroeconomic challenges. He said the FDI had already posted a decline of 53 percent and exports have fallen by 9 percent in the first four months of current financial year and added that giving irrational hikes to utility tariffs and taxes would cause further decline in economic activities apart from discouraging the investment. staff report

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