KARACHI: The Karachi Chamber of Commerce & Industry (KCCI), in its comprehensive document highlighting anomalies in federal budget, stressed the need to continue Regional Competitive Energy Tariff (RCET) for five export sectors by providing them a level playing field to compete with the regional competitors.
KCCI also underscored the need to restore and provide all incentives under the National Textile and Apparel Policy 2020- 25, particularly DLTL, TUF, etc., to the Value-Added Textile Industry.
KCCI further suggested to restrict Super Tax to Tax Year 2023 as it was imposed for a period of one year vide Finance Act 2022 but if it was not possible this year then maximum rate of this levy should be reduced to 4 percent instead of 10 percent.
KCCI noted that a new concept of ‘additional tax on income, profits and gains’ with a capped rate of 50 percent has been introduced for extraordinary incomes arising from economic factors to be determined by the Federal Government for preceding five years.
The proposed section carrying this concept should be deleted as any income, on which tax under normal course, has been levied, it should not be taxed again. Moreover, existing rates of income tax were already too high so this further tax will burden documented sector.
Referring to amendment in the definition of associates, KCCI advised to abolish the amendment as majority of the suppliers, from whom import is made or buyers to whom goods are exported, will become associates, which is against the intent of the law.
KCCI further recommended that the bonus shares, not within the scope of income, should not be taxed as it will create unnecessary hurdles in way towards industrialization and its growth.
KCCI noted that the bill proposes to introduce a tax holiday for SMEs set up exclusively as agro-based industry in a rural area, which should be extended to all areas including urban to incentivize investment in agro-based industries across the board.
KCCI pointed out that the bill has proposed incentive of exemption from advance income tax collection from non-resident with certain conditions. While appreciating this amendment, KCCI suggested that all unregistered persons must be required to mandatorily file income tax return and report advance tax payment in income tax return subject to exclusion given under the law. “Moreover, one percent advance tax under section 7E is only being collected from filers. In order to rationalize this, property registration authorities should be made liable to charge 2 percent tax (1 percent increased rate for being non-filer) under section 7E on all property tax challans issued to non-filers, which would broaden the tax net and rationalize tax collection on immovable properties,” KCCI added.
Copyright Business Recorder, 2023
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