The Federal Board of Revenue (FBR) will finalize its viewpoint on the recommendations made by Pakistan Business Council (PBC) to the Finance Minister Asad Umer on taxation issues, for next federal budget, including discontinuation of Super Tax. Sources told Business Recorder here on Tuesday that the meeting of PBC was held with Finance Minister and FBR on December 19, 2018. PBC has submitted its recommendations to the FM for next fiscal year. One of the key recommendations for next federal budget is the discontinuation of Super Tax.
Tax authorities will draft their viewpoint on the recommendations of the PBC pertaining to the customs and Inland Revenue. FBR will share its viewpoint with the Ministry of Finance. The PBC has submitted recommendations for next fiscal year as well as non-money bill matters.
Pakistan Business Council has recommended that the Super tax to be discontinued in the next budget.
PBC recommended Finance Minister to remove tax on retained reserves; exempt inter-group dividends from cascading taxes; restore the group relief as per Finance Act 2007, bring corporate tax rate to 25 percent and minimum and alternate corporate tax should not apply in first 5 years of a capital intensive project.
PBC has further recommended Finance Minister that losses arising from Capital Allowances should be allowed to be carried forward and GIDC should be withdrawn.
Other non-money bill matters relating to several ministries included expedite refunds and rebates. It recommended that the energy intensive import substitution industries should selectively be provided energy at rates similar to the five export sectors. The criterion would be export potential.
The SME sector does not have resources to deal with complex duty avoidance/ reclaim schemes. The duty and tax remission for export (DTRE) scheme and Customs Bonds Schemes should be simplified.
Rebates for exporters should be automated and credited by banks on receipt of export proceeds, PBC recommended.
Exporters should be exempt from sales tax and withholding tax to avoid buildup of tax refunds, it said.
It recommended that the government should obtain parity access with Bangladesh and ASEAN in existing agreements, especially with China and pursue similar access to Japan, Canada, Norway. Moreover, there is a need to move cautiously with Turkey and Thailand on trade agreements.
It recommended an active and effective National Tariff Commission to promote local manufacturing. The NTC Tribunal is currently non-operational. The MoF needs to appoint tribunal members.
The government should address fragmentation post the 18th Amendment to resolve harmonize, unify and simplify labour laws; environmental and food standards; agriculture policies and unify the 47 taxes and simplify processes under a National Tax Authority.
Anomalies in the Companies Act need to be removed, especially section 452 (Registry of Foreign Shareholdings), PBC added.
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