Rawalpindi Chamber of Commerce and Industry (RCCI) has forwarded the budget proposals to the government in which it has been emphasised to address the taxation issues and present a tax free budget. The proposals also underlined the need to take measures for restoration of industry. Tax net should be increased instead of tax slabs.
The proposals sent by RCCI President Asad Mashhadi said that tax should be reduced on housing and construction sector as almost 45 other industries are dependent on this important segment of economy. "Government receives tax at the rate Rs 50 per square foot from construction contractors and Rs 100 per square yard from town planners on covered area of any project, which is too much high. It should be reduced to 50 percent.
President RCCI said that cement industry contributes Rs 30 billion per year to the national exchequer as well as this industry also added six million ton in the exports of the country during the last six months. Excise duty on cement may be reduced to Rs 700 per ton from Rs 900 per ton. That will also bring down the construction cost too.
Asad Mashadi said that the withholding tax on cash withdrawals from the banks should not be exceeded from 0.1 percent. Due to high rate of withholding tax, people have left dealing with the banks and illegal business of 'Hundi' is on the rise. He suggested that 15 percent tax should be fixed on limited firms instead of 20 to 35 percent.
He said that the biggest of all challenges is to over come the energy crises due to which not only ordinary man but the business community is being affected badly. It is the need of the hour to initiate work on war footing basis to resolve this issue and it needs huge investment. It is suggested that government should provide free of cost land for installing power production units in the country.
He suggested that surcharge on electricity bills may be withdrawn to offer some relief to the consumers as the load shedding irked the whole nation and industry is going to close down due to energy crises. He said that 10 percent sales tax should be charged on raw material while, on finished products it should be 12 percent. The existing rate of 15 percent sales tax is the highest in entire region.
"It is necessary that government should decrease the tax rate on petroleum products as it is getting per litre tax of Rs 25.46 on diesel, Rs 36.49 on HOBC and Rs 17.95 on kerosene oil. It has become very necessary that the price of petroleum products should be brought down to lessen the production cost and make the industry able to compete with the other countries," he added.
The President RCCI proposed to tax the agriculture sector but small farmers may be given exemption. The poultry industry is facing crises for the last two years and government should compensate it. Government considers it as a part and parcel of agriculture sector but the electricity bill from poultry industry is charged on industrial tariff which is unjustified.
He said that the pharmaceutical companies are at the take off position with the exports of 100 million USD. Government should offer some incentives to increase this volume. He said that the automobiles sector excelled a lot from 2001 to 2007 but now it is once again going down. It is suggested that five percent excise duty may be abolished from the sales of cars as well as the import of second hand spare parts should be banned.
He said that the industry is in so much bad condition that it had never been before. Due to different factors, almost half industrial units have been closed down and remaining are shrinking their production and functioning in only single shift, due to which unemployment and poverty has been increased. It is proposed that government should announce special package including tax holidays and cheap means of energy for the revival of the industry.
He said that the current wave of price hike has not affected the living standard of the people but also snatched the purchasing power from them. It is suggested that basic limit of exemption from income tax for salaried person should increase from 180,000 to 250,000. It will increase the purchasing power of the consumer which will create the boost in demand for the commodities.