ACCA Pakistan has recently submitted its budget proposals to the Central Board of Revenue (CBR) under the theme "Striving towards a more equitable Pakistan." According to a press release issued on Thursday.
ACCA Pakistan's recommendations focus on a fair tax regime having fair direct taxes, indirect taxes, environmental taxes, social security system as well as mechanisms to develop tax culture.
In order to sustain the high level of investment rates experienced in the past and to attract foreign investment in the country, ACCA Pakistan proposed a reduction in the flat 35 percent corporate tax rates.
As compared to other countries in the region (Afghanistan: 20 percent, Bangladesh: 20 percent, China: 33 percent, India: 33.66 percent, Indonesia: 30 percent, Malaysia: 28 percent) Pakistan does have considerably high corporate tax rates. ACCA Pakistan also recommended special allowances for infant companies.
They also argued that lower tax rates for small and medium enterprises and new business ventures will encourage entrepreneurship from the lower income groups and generate more employment in the economy. It was also proposed that female and young entrepreneurs should be given special tax benefits to encourage entrepreneurship.
ACCA Pakistan proposed a gradual adoption of capital gains tax allowing for large gains on land holdings, property and shares to be taxed.
ACCA Pakistan also recommended that CBR should broaden the tax base and increase revenue collection from agricultural income. ACCA Pakistan also proposed a reduction in the Sales Tax rate to 10 percent to lessen the burden on end consumer and help reduce inflation.
ACCA Pakistan strongly supports the government's determination to deal with environmental pollution, and recommended the adoption of tax measures to deal with environmental problems. ACCA Pakistan proposed the idea of levying a small Green Tax on plastic bags.
In addition to Green taxes, it was also recommended that the government should assign quotas for emission of greenhouse gases using carbon credits. A Carbon Credit is a tradable permit scheme which gives the owner the right to emit one ton of carbon dioxide.
Businesses that produce emissions which is over the quota assigned to them, they must buy carbon credit for their excess emissions. ACCA Pakistan is also of the opinion that appropriate tax incentives should be given to help develop Pakistan's environmental industry and to raise awareness of environmental protection.
In order to ensure a more equitable tax regime, ACCA Pakistan proposed a social security system where there are special tax exemptions for widows, single women and elderly citizens.
ACCA Pakistan emphasised on development of a culture of paying taxes. It is important to communicate and make people (the taxpayers and potential taxpayers) understand that 'do-ityourself-tax system' is in place which trusts the taxpayers and facilitates them unconditionally.-PR
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