Sarhad Chamber of Commerce and Industry (SCCI) has called for review of Afghanistan-Pakistan Transit Trade Agreement (APTTA) for the facilitation of imports with Afghanistan and introduction of an effective mechanism based on some quantitative ceilings to collect duty at import stage. Similarly, it has also recommended the streamlining of exchange control mechanism for financing/ or under invoicing of goods. These demands have been made in the SCCI's recommendations on the Federal Budget 2019-20.
The recommendations state that according to the considered views of the relevant committee on Afghan Transit Trade, the Afghanistan-Pakistan Transit Trade Agreement had not been reviewed for years. The ignored treatment at the law-makers' end has resulted in diversion of trade to Iran seaports due to lack of action by Pakistan Railways in particular.
It said that according to a report analyzed by the SCCI, India has succeeded to penetrate in Kabul slashing the market share of Pakistan by more than 50% during last two years. Unfortunately, Pakistan's trade with Afghanistan fell to US$ 1.2 billion from US$ 2.7 billion in the last two years and the country has been losing even the traditional markets of flour, men and women's clothes and red meat etc.
It added that there is no denial of the fact that Kabul has been the natural market for Pakistani exports but that is changing as cheaper products from China and India flooded in Afghanistan where the role of the traders from Pakistan with support of the government is most essential.
The chamber specific committee on Afghan Transit Trade has reported that the Afghanistan intends to include India in the transit trade arrangement to which Afghanistan appears more serious. Also, there are apprehensions that the Afghan transit trade could shift to Iran after India.
The recommendations said that it is already in the notice of the Federal Board of Revenue (FBR) that the Afghan transit trade facility is being misused to Pakistan's disadvantage by smugglers including confiscation of large consignments of mobile phones, air-conditioners and electric goods which also resulted into filing complaints in the national anti-graft agency NAB and other agencies. So the SCCI recommends that the FBR should formulate policies in consultations with the chamber afresh.
The SCCI's recommendations for the upcoming budget also include incentives for the existing tax payers to not only promote and build relations between and amongst the FBR and withholding agents, particularly from corporate sector, but also to enhance and accelerate the quantum of withholding taxes compared to the level of amounts deducted at source previously.
The FBR may consider extending certain incentives to the existing taxpayers having filed their tax returns for at least last three years or more without apparently attracting any unlawful declaration or warranting inquiries and audit. Such incentives, the chamber should be offered by extending special discounts equivalent to 50% in respect of payment of fee and taxes for the taxpayer and his spouse in issuance of passport/renewal thereof, driving licenses/renewal thereof, waiver on loan processing fee, rebate in electricity/other utilities and banking service fee.
It has also recommended to allow some incentives to the complaint taxpayers in the shape of reduced rate of minimum tax or a lump sum rebate on overall tax liability as the case may be, if they declare their respective turnover by furnishing details of CNIC/NTN of their respective customers to help data compilers for the increase in tax base.
It may be added that the current taxation policy doesn't attract existing taxpayers from the point of view of allowing any incentive to promote tax culture. The board should allow some good percentage (15 to 20%) out of the amounts withheld by the taxpayers as obligatory on them as a withholding agent.
It said that no agent in the world will ever work free of remuneration and it is very much obvious that the withholding agent is constantly incurring huge cost of services to monitor an invariable deduction of tax, payment onward to the FBR within the stipulated time period and above all, maintain a proper and systematic record by filing requisite periodical returns etc., for sure involve extra-ordinary effort and cost of services.
The complaint taxpayers are thus, very much entitled for encouragement and a compensation in the shape of retaining some good percentage (15 to 20%) on a monthly basis.
For the purpose of broadening channel and marketing of the FBR, the SCCI has recommended that all taxpayers should be subjected to audit on a cyclical basis once in 3 to 5 years depending on the size of and nature of business and the audit of corporate taxpayers should be assigned to firms of chartered accountants.
Comments
Comments are closed.