All type of income should be taxed and there should be no discrimination in taxable income to end the corruption and to generate maximum revenue to put the country on the path of progress and prosperity. Multan Chamber of Commerce and Industry (MCCI) in its budget proposals has demanded for inclusion of 0.7 million wealthy people (detected by special teams of FBR) in tax-net who were not paying direct taxes to the government.
MCCI advocated the implementation of direct taxes mode in upcoming budget in line with advance economies instead of indirect taxes. MCCI President Anis Sheikh urged the government to cut the rate of duties on all smuggling-prone items to check smuggling of plastic moulding compound, electronics, chemicals, fabrics and tyres and tubes.
He said hospitals, clinics, restaurants, bakeries, wedding lawns, travel agents etc should be brought into the tax net. MCCI President said almost 70 percent of the total taxes collected in Pakistan were consisted of indirect taxes while the direct taxes were not more than 30 percent that was totally against the practice in advance economies where the ratio of direct taxes in 70 percent and remaining was indirect taxes.
Direct taxes mean taxing the rich class and on incomes and relief to the poor while the indirect taxes are hitting the general public hard. The indirect taxes like levies and taxes on petroleum products and taxes on electricity and gas bills are not only jacking up the inflation but also coming in the way of long standing business community demand of cut in interest rates in line with regional mark-up rates.
He called for focus on investing in energy solutions and lowering of tariffs on smuggling prone items in the forthcoming budget to achieve key economic targets set for the year 2012-13. In order to tackle energy shortages, the government would have to allocate maximum funds for construction of dams/water reservoirs, tapping of Thar Coal, completion of Iran-Pakistan gas pipeline and establishment of LNG terminals.
He said sufficient funds should be allocated in the forthcoming budget for Thar coal power generation project, Dasu power project, Diamer Bhasha Dam, Munda Dam, Gomal Zam, Satpara power project and Kurram Tungi Dam. He said at least Rs 200 billion or 10 percent of the total budget should be allocated for hydel power projects. He said the country's reliance on costly thermal power was jacking up the cost of production and import bill. The country needs an urgent shift in its energy-mix in favour of hydle power and local fuels.
The Government would hopefully earmark funds for the early completion of Iran-Pakistan gas pipeline and LNG terminals to keep the industrial wheel running. Rising risk perception about investing into Pakistan is hitting hard the Foreign Direct Investment (FDI) that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving chambers of commerce in the country.
A number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, textiles and pharmaceutical offer lucrative investment opportunities to foreign investors but unfortunately due to absence required funding for a proper and well tailored marketing strategy these opportunities are unattended even today. He suggested the sales tax slab should immediately be curtailed to 10 percent from existing 16 percent in order to reduce inflationary pressures or simply to check inflation.