KARACHI: President Federation of Pakistan Chambers of Commerce and Industry (FPPCI) Irfan Iqbal Sheikh has said that after in-depth analysis of the Federal Budget 2023–24, FPCCI has come up with many budget anomalies; which will prove to be counterproductive if not rectified before the passage of the final version of the Finance Bill by the Parliament.
He expressed this while addressing a post-budget press conference here at Federation House on Saturday.
Irfan Iqbal Sheikh said that the most important anomalies are related to the Customs. For example, Section 14-A should be revised as, at present, the business community is facing major problems related to Delay Detention Certificate on imported goods.
The business community demanded that shipping lines and shipping agents should not give importance to the Customs Delay Detention Certificate; which is the main reason for the legal deficiency in the relevant regulations.
Another important issue with the Customs is with reference to reduction of customs duty on Butyl Acetate and Di-Butyl Orthophthalates in the 5th Schedule. Because of which, the domestic industry is likely to be affected. The business community is of the view that the interests of the local industry should also be taken into consideration in this regard.
The FPCCI chief added that there are concerns of the business community on paper and paper board. These provisions refer to the regulatory duty enacted in HS.4802. The position of the business community is that this RD should be terminated immediately. Similarly, some reservations of HS 4810 are in respect of withholding tax on raw materials; which is requested to be revised.
In the current budget, the government has made adjustment of customs duty on some items which are related to chapter 47 and chapter 48 of Pakistan Customs Tariff. There is a need to revise the rate of taxes on these items.
Irfan Iqbal Sheikh also highlighted the budget anomalies in income tax. Fleet Operators and Warehousing Logistic Association had pointed out some problems in the anomaly appeared in Income Tax. The Association said that the tax rate has been revised in Section 153 of the Income Tax Ordinance and this rate should be revised again in favor of the industry.
As far as income tax goes, it is requested to the government that it is grossly-inappropriate to put more burden on the registered taxpayers. Therefore, new taxpayers should be brought in the tax net; so that, the tax burden is distributed equally.
Irfan Iqbal Sheikh emphasized that the existing slab of the Super Tax also needs to be revised downwards; which is an undue burden on the business community.
The existing rate of WHT has been increased; which covers companies, service sectors and commercial importers; and, persons having bonus shares – and, due to the increase in WHT business, industry and trade community has been further burdened.
In the proposed taxation reforms, some suggestions have been sent by the women chambers as well; which are related to training, skills development and tax adjustment in the relevant sectors.
The FPCCI chief also maintained that anomalies have been detailed in the erstwhile FATA/PATA regions; since the time it was implemented, there have been concerns from the business community regarding unfair concessions and their misuse. The stance of the business community is that smuggling is flourishing due to misuse of these privileges. The effect of which is affecting the industry and trade of other regions of the country.
According to Section 148 of the Income Tax Ordinance, the government is empowered to levy Advance Tax on imported goods at the import stage. According to this section, this tax is applicable to various categories. But it has been argued by trade circles that there is a clear difference in taxes between commercial importers and manufacturers under this section. It is expected that the government will close this gap; so that, the trend of competition remains equal at all levels.
Irfan Iqbal Sheikh also demanded that the Section 99-D of the income tax should be withdrawn to stop the discouragement of business community for making profits or gains out of their businesses legitimately.
For sales tax, a number of anomalies have also been received in connection with the ST, important among them, description of retail packing is very critical. Since, there is no clear word in the budget in this regard, there have been reservations in the promulgation of the 3rd Schedule of the Sale Tax Act, 1990.
Especially tea, which is a major commodity on the import bill, has always been a subject of debate whether 5 kg retail packing can be called bulk packing or not. The government should work with the stakeholders to end this anomaly forever – as it can result in government’s revenue.
Irfan Iqbal Sheikh also pointed out the issue of undue and anomalous sales tax on fans and cotton ginning mills sector; as these sector are labor-intensive and needs governmental waivers in order to keep generating jobs and revenues.
Copyright Business Recorder, 2023
Comments
Comments are closed.