The President of Karachi Chamber of Commerce and Industry (KCCI), Abdul Majid Haji Mohammad, has proposed three years' amnesty from audit for new taxpayers. In a communication to the government, he said that to increase the number of registered taxpayers, national tax number should be encouraged for all sectors. He said that Pakistan has narrow tax base, and over-dependence on tax at source.
He also suggested that wherever income is generated it should be taxed without exemption or discrimination. He recommended that to bring new assessees in the tax net, section 116 (2) should be amended as follows:
-- The narrow tax base and over-dependence on deduction of tax at source should be done away with.
-- Consequently, the number of new taxpayers should be increased, and a three-year amnesty from audit should be announced for the new taxpayers. He expressed hope that this measure would result in broadening of the tax base, promote documentation of economy, and increase the number of taxpayers.
Regarding import of raw material, he recommended that all raw materials imported for industrial consumption must have zero rate of duty and lower rate of sales tax to reduce cost of production and expand industrial output.
He said that customs duty, 16 percent sales tax, and 3 percent withholding tax on import of industrial raw material substantially increases the cost of finished products. The KCCI president noted that higher prices of consumer goods result in lack of domestic demand. Higher prices of Pakistani products for export markets compared with China, India and other countries and continuing cycle of low demand/low supply are having negative impact on GDP growth.
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