The Ministry of Finance and the Federal Board of Revenue should not neglect the proposals made by the business and trade community and they should make the federal budget realistic and businesses friendly.
The Multan Chamber of Commerce and Industry (MCCI) has submitted to the Federal Board of Revenue (FBR) a set of proposals for consideration and incorporation in the federal budget for 2016-17, stating that these proposals would help increase economic activity and widen the tax net, thereby increasing the government revenue.
MCCI President Fareed Mughis Sheikh said in a statement issued here on Sunday that the proposals had been categorised into income tax, sales tax and import and export with special focus on the documentation of the economy and expansion of tax net.
Fareed Mughis said that rate of taxes and number of taxes must be reduced to lessen the burden on the people who are already paying taxes. Key proposals in the category of income tax relate to broadening the tax base, it was suggested to set up a business registration authority. Chamber membership should be made compulsory for the businesses operating all over Pakistan, which would eventually lead to centralise the tax related data for and broaden the tax net. Broadening the concept of enhanced/reduce rate for filer and non-filer, and reduction in the rate of income tax has also been sought.
"Corporate tax to be brought down to 25%, as it currently stands at 33 percent. Pakistan's corporate tax rate is third highest in world. Sales tax rate should be reduced to single digit gradually to 5 percent, the MCCI suggested.
The government should take additional measures to incentivize exports and to ease the cost of doing business besides improving the overall regulatory regime to facilitate exporters, it added.
The MCCI chief suggested that there is a need to address the key issue of massive under-invoicing/dumping of imported product. "Import value is fixed in consultation with industry. The rate of advance tax on imports under Section 148-manufacturers importing raw materials need to be reduced to 1%.
The government should convert the youth loan scheme into a venture capitalist scheme, he said, adding that Pakistan lacks infrastructure to facilitate foreign investment, suggesting it to reduce the duty on coal import to 0 percent so that the cement industry could flourish.
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