The Lahore Chamber of Commerce & Industry has hoped that upcoming budgetary document would be drawn according to the wishes of business community. LCCI President Almas Hyder, Senior Vice President Khawaja Shahzad Nasir and Vice President Faheem-ur-Rehman Saigal in their budget proposals on Friday said that ongoing economic scenario has made upcoming budget more crucial. Business community is the backbone of the economy and economic force therefore its suggestions must be top priority of the government to slash the economic challenges.
They said that energy prices must be uniform in all provinces including electricity and gas as these are basic raw materials for the industry and any fluctuation in their prices directly affects the cost of doing business. All raw materials must attract zero or low custom duties.
The government must eliminate Regulatory Duties (RD) and Additional Customs Duty (AD) on raw materials, so that local industry is able to compete with smuggling and mitigate the effect of low tariff FTAs. They said that rate of duties for trade and industry must be same, so that SMEs who procure from Trade should have a level playing field.
The LCCI office-bearers said that Customs duties on intermediary products should be reduced so that our industry is able to import quality materials, components and machinery from the rest of the world at the same duty rate at which it imported through different FTAs.
They said that non-payment of refunds is drying out liquidity from the markets. Payment through promissory notes should also be extended to all sectors including five zero rated sectors. Refunds should be issued automatically without application, or pre-audit, within 60 days as per rules.
They suggested reduction in interest rates since high rates have made borrowing expensive for private sector and discouraged investment. There should be a window of low interest rates for SMEs as these are backbone of the manufacturing sector. They said that the exemption from the payment of Sales Tax on imported plant and machinery for Greenfield projects should also be granted to brownfield projects. Special tax facilitation is needed for sick units, for which rules should be framed.
They said that the provincial governments should Re-zone areas in and around urban centres, both for industrial and commercial use to help entrepreneurs invest in green field and other projects. The government should demarcate industrial and economic zones and set up SEZs urgently, they added. They said that land provided to foreign investors should be offered on 50 year lease only. For Pakistani investors, option should be available for freehold and leasehold properties.
Almas Hyder said that foreign investment should only be allowed as a joint ventures with Pakistani investors or as a public listed company so that local investors also benefit. All existing industrial units should be regularized without penalty. He said that warehousing of raw materials should be allowed in EPZs and SEZs. Company office should be formed for registration of new companies. Registering a company should be separated from regulating a company. Regulation should start once the company gets operational.
They said that there should be one tax collection authority for the collection of both federal and provincial taxes. The total number of taxes should be reduced to 5 by clubbing Labour related taxes like EOBI, PESSI, WPPF, WWF, professional and property tax, federal and provincial sales tax.
"The frequency of tax payments should be reduced by reducing the frequency of the tax payments of EOBI, PESSI and Sales Tax. Steps must be taken to separate tax collection, from service provision, so that departments like PESSI, EOBI etc. stop sending inspectors for tax collection and provide government services like hospitals, pensions etc only. All audits should be Risk-based (with one-month prior notice) rather than random Audits, they added.
There should be holiday for all taxes and levies (federal and provincial) for 3 years for the newly registered companies, especially SMEs. No tax exemption should be given on imports, if the equipment, machine or part is locally manufactured. Local Industry has suffered and feels left out when government allows tax free import of complete turnkey projects. To enhance the tax base, fixed tax system should be introduced at the SME level, they added.
They were of the view that there should be exemption from audit for taxpayers who deposit 20 percent more tax over the last year. The tax exemption certificates to commercial importers & manufacturers should be issued automatically if their withheld tax is equal to last year's tax. The additional Sales Tax of 3 percent for non-filers should also be eliminated. It is actually an additional tax on compliant tax payers.
They said that discretionary powers under Section 177, 214C, 138, 175 of (Income Tax) and 40B, 25 37, 38A, 40 and 48 of Sales Tax be minimized in consultation with stakeholders. They said that there should be a single Audit for Sales Tax, Income Tax and Withholding Tax. All incomes must be treated and taxed equally.
Comments
Comments are closed.