The Multan Chamber of Commerce and Industry (MCCI), in its sales tax proposals for the Budget 2006-07, has urged the government to introduce simplified tax system with very logical requirement of book keeping.
It said that the sales and retail taxes have created confusion in various classes of sale tax registered persons. "Non-compliance due to lack of understanding of the complexities, has encouraged corruption and insecurity, resulting in non co-operation with the tax department. This general perception has added to reluctance of unregistered businessmen to join the club of their aggrieved registered counterparts," it added.
The MCCI, in its proposals, copy of which made available to Business Recorder by MCCI on Monday, also said the discretionary powers of sales tax officer for assessment, recovery refund and tax credit, which are main source of corruption, should be suitably amended with necessary checks and balances and procedure be simplified.
It also urged that the sales tax law should be educative and not punitive. "At least for 10 years the imposition of penalties and prosecution should be deferred or made affordable to avoid undue harassment. Through an amendment to the Income Tax Ordinance, 1979, the assessing officer of the income tax is made obliged to accept the declared turnover of a registered person. The present powers DC Income Tax to enhance the turnover of a registered person should be abolished, as it amounts to defying the sales tax regime and importance of documentation prepared by a registered tax payer," MCCI also proposed.
The Multan Chamber also urged that keeping in view the substantial increase in number of registered persons in Multan an office of the Appellant Tribunal should be established there.
It said that rates of sales tax are very high, which creates temptation for evasion and thus proposed that lower rate of sales tax, not more than 5 percent, be fixed.
It also said that the government must find ways to attract voluntary registration of all business community. It also claimed that all government departments are compelled to make purchase from registered persons only; this requirement is being met at the cost of quality and higher prices, as small units, not affording registration, are unable to offer better price or quality to the government agencies. The department may consider suitable amendments by categorising such small vendors to quote and supply without registration, the MCCI added.
According to the MCCI document, input sales tax paid by registered persons on electricity, telephone bills could not be adjusted, as generally the utilities are not in their names, and proposed that the same may be allowed if verified that they are used for business purpose. Moreover, stay of payment of disputed demand should be allowed automatically when a person goes to appeal against the orders passed by any sales tax authority. Besides some of these general proposals, the MCCI proposals also discuss various other section wise topics.
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