Sarhad Chamber for max 20 percent income tax

The Sarhad Chamber of Commerce and Industry (SCCI) has proposed to fix 20 percent maximum marginal rate of tax for both individual and corporate tax payers, without any surcharge or cess in any form, in the country's budget for 2006-07.
The chamber has forwarded detailed proposals to the Ministry of Finance. Among its proposals it said that in case of individual tax payer nil tax slab be provided for incomes up to Rs 150,000, and 10 percent on income from Rs 150,001 to Rs 500,000.
It said that lower tax rates would ensure better compliance and tax collection would go up and most of the black money would get introduced into commercial and industrial use, pumping billions of rupees into the economy.
The chamber has proposed that income of partnership firms should be taxed in the hands of partners, saying that it is not at all justified to tax the income of the firm, rather whole of the income of the firm should be allowed to be allocated among partners and then taxed in their respective hands.
The proposals further said that along with tax returns, every individual assessee should be required to file a statement of his assets and liabilities as on June 30 of the tax year, including assets owned by spouse, minor and dependent children, showing actual cost, mode and date of acquisition of each property. This single measure, the chamber said, would be enough for eradication of black money to a large extent. It called for no deduction except for saving of up to Rs 200,000 per family.
The SCCI has also suggested that no dividend income should be taxable in the hands of recipient, adding that the dividend withholding tax should be done away with; rather imputed credits should be allowed just like TDS in the hands of the recipient of dividend against actual income tax paid by a company.
In case any company does not pay any tax, in spite of income, due to various deductions, incentives or exemptions, imputed credits should be allowed against only the actual tax paid by such companies.
It said that depreciation, to be provided in the books of account under the Companies Ordinance, should be the same as provided under the Income Tax Ordinance, on written down value (WDV) basis, and the companies should be allowed to adjust their schedules of fixed assets during the transition period to bring the same as per Income Tax Act, so that book results of the companies are in agreement with the taxable profits, by and large, and thus present a true and fair state of affairs of economy.
"The rates of depreciation under the Income Tax Ordinance should be rationalised on realistic basis," the SCCI in its proposals said.