Tax-to-GDP Ratio Should Be Increased Through Broadening of Tax Base Atif Ikram Sheikh

Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has emphasized that, while FPCCI supports
the efforts to increase tax-to-GDP ratio, it has to be achieved through broadening of tax base and
simplification of the taxation system – rather than further squeezing the already taxed. The only
pragmatic approach to achieve tax-to-GDP ratio of 15 percent in the next 5 years is to add 1.5 to
2 million new taxpayers in the tax-net, he added.

Mr. Atif Ikram Sheikh maintained that the tax and FBR reforms should not be attempted in a
consultation-less manner as these kinds of efforts have been grossly unsuccessful multiple times
in the past; and, the successive governments resorted to the regressive and anti-business
measures of further increasing the taxes on existing filers.

Mr. Atif Ikram Sheikh stressed a three-pronged strategy to broaden the tax base: (i) end-to-end
digitalization of the taxation system to bring transparency & fairness (ii) FBR reforms in
consultation with the business community in light of the ground realities (iii) an end to
maladministration & harassment of trade & industry at the hands of taxation machinery

FPCCI Chief stated that the business, industry and trade community understands the need for the
country to enter into a new, expanded and longer-term IMF program; which will entail, as per
past practice, imposition of more taxes – however, FPCCI wants to make it clear that last few
years have been unprecedentedly difficult for trade and industry due to COVID, floods, cost of
doing business, exchange rate volatility; and, incremental rounds of increase in electricity, gas
and petroleum prices.

Mr. Atif Ikram Sheikh apprised that the core inflation has come down to 12.8 percent and
headline inflation recorded at 20.7 percent in the month of March 2024; which is the lowest in 22
months; and, the trajectory is categorically showing a downward trend for the months to come.

Therefore, it becomes imperative to reduce the key policy rate at the earliest; and, a
regionally-competitive export finance scheme (EFS) and long-term financing facility (LTFF)
should be offered to exporters, he added.

Brig Iftikhar Opel, SI (M), Retd.

Secretary General