FPCCI holds pre-budget consultative meeting with Razak

Federation of Pakistan Chambers of Commerce & Industry (FPCCI) held a pre-budget consultative meeting with Abdul Razak Dawood, Adviser to PM for Commerce, Textile and Investment, on Video-link, and discussed its proposals for the forthcoming Federal Budget 2020-21.

Speaking at the meeting, President FPCCI Mian Anjum Nisar stressed the need to take pre-emptive measures right now so that the country is not made dumping yard in post Covid-19 pandemic era.

He inviting attention of the Adviser to PM, Abdul Razak Dawood towards 20,000 containers which could not be cleared due to lockdown and lying at ports urging him for waiver of their demurrage and detention charges. He urged the Adviser to PM to support the trade & industry in reducing their cost and ease of doing business particularly in the current Covid-19 pandemic era.

Zakaria Usman, Convener of the FPCCI Budget Advisory Council (BAC) said that the Council has formulated Pre-Budget Proposals on the basis of impartial, unbiased and transparent manner after taking a painstaking lengthy process which involved incorporating feedback on matters related to revenue and taxation throughout the year from our member trade bodies located across the country and input obtained from stakeholders, tax experts, tax practitioners, knowledgeable peoples. He informed that the FPCCI had prepared a Shadow Budget in 2014 wherein it was proposed to abolish the refund culture and GST should be collected at 5 percent so that the benefit is passed on to the end-consumers which would lead the control over inflation and poverty on the one hand and enhancement of economy on the other hand.

Referring to Covid-19 pandemic the BAC convener underscored the need to take extraordinary steps to support trade and industry to ensure their survival on sound footings. He said that the customs tariff be levied on the basis of cascading principle to curb post-budget anomalies.

He proposed to encourage import substitution industries and export of non-traditional items, establishment of value added industries, promotion of Branding etc. He also invited attention of the Adviser to 6000-7000 motor vehicles which have been stuck-up due to non-availability of encashment certificate because the international flights are not operational and the concerned diaspora could not come to Pakistan.

The FPCCI in its presentation proposed that Corporate Tax rate be reduced from 29 percent to 25 percent and thereafter gradually reduce at 1 percent annually upto 22 percent; income from property be taxed at a uniform rate of 15 percent of the gross rent as full and final discharge of tax liability; Tax credit at 3 percent available to a manufacturer on 90 percent of his sale to registered person upto June 2017 may be restored; the tax credit for investment under Section 65B may be restored, Section 65E may be extended to factory building and manufacturing related infrastructure also and be extended to 30th June 2025; Minimum tax rate should be reduced from 1.5 percent to 1.0 percent; Alternative Corporate Tax (ACT) may be deleted to provide correct taxation of companies; the power to select the return for Audit/amendment of Assessment of income may rest only with the FBR under Section 214C of the Ordinance; Alternative Dispute Resolution be reactivated; rental income from property, AOP or individual and company be taxed at a uniform rate of 15 percent of the Gross Rent as full and final discharge of tax liability, as it has also increased the rent of warehouses etc., and as such has escalated cost of doing business; further tax on sales to unregistered persons be deferred in Covid-19 pandemic period or it should not be charged if CNIC condition is complied; Time limitation for filing of ST Revised Return be extended from 120 days to one year; Refunds already approved may be allowed to be adjusted against import of raw material and machinery; Pakistani repatriates be allowed to purchase goods from manufacturers in foreign exchange which should be considered as export; 25-30 documents required under DTRE Scheme be reduced to 3-4 documents; discrimination between industrial and commercial importers of plant and machinery for issuance of exemption certificate and in taxes & duties be done away with.

Razak Dawood agreed that the turn over tax should be reduced to zero percent, DTRE Scheme would be simplified; discrimination between commercial importers and industrial importers of plants & machinery and raw material would be done away with.

He appreciating the FPCCI Pre-Budget Proposals invited the FPCCI delegation to visit him in Islamabad at the earliest to discuss FPCCI budgetary proposals in detail including identification of raw materials for reduction/rationalisation of duty on them.