A meeting is schedule to be held at Finance Department Sindh on Wednesday (today) to discuss tax anomalies and also to consider the incorporating budget proposals. The officials of Finance department, Excise and Taxation, Sindh Board of Revenue (SRB) will attend the meeting. The Karachi Chamber of Commerce and Industry (KCCI) representatives likely to attend the meeting.
The chamber has suggested that under schedule II tax, the rate on service tax is 16 percent to 19 percent, it should be reduced. The chamber noted that the present rate of tax on services in on higher side for small investors and service industry. High tax rate generally result tax evasion. Reduction of tax rate will increase number of tax payers.
The chamber further suggested that tax rate should be brought in single digit to attract local and foreign investors. The chamber noted that there is a lack of harmony of provincial law with the federal law as:
1. Out-of tax period adjustment allowed for 4 months instead of 6 months.
2. Input tax admissible on cash basis instead of accrual basis.
3. Input allowed on consumption basis instead of purchases.
The chamber suggested that sales tax on services and goods at wholesale or retail stage should be within the jurisdiction of SRB. Tax on agriculture should also be placed with SRB. The chamber further recommended that the taxes collected by excise department should be transferred to SRB. It is further suggested that before issuing any notification it draft should be consulted with all the stakeholders for comments.
The chamber pointed out that there is a tax on construction; repair and maintenance work in Sindh only recommended that this tax should be withdrawn. The chamber further suggested that export oriented value added sector should be exempted from provincial taxes and levies for four years to kick start economic activities, which at present slowing down due to power, gas and law and order crises.
It is noted that at government collection 21 taxes including provincial and local taxes, labour cess, stamp duty etc. The industries dealing with 20 different departments including excise and taxation, SESSI, Professional tax, electricity inspector, boiler inspector etc. The chamber proposed creating one window facility to deal with all these matters. The chamber further suggested that self-assessment scheme should be implanted in true spirit and there should be a role of KCCI in alternative Dispute Resolution (ADR). The chamber further suggested that different slabs of provincial tax should be abolished and it should be collected on fixed bases.
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