Faisalabad Chamber of Commerce & Industry (FCCI) will compile comprehensive budget proposals in addition to suggest ways and means for expanding much needed tax net in Pakistan, said Shabbir Hussain Chawla, FCCI president. He was chairing a special session of FCCI Tax Committee on Monday to finalise the draft of budget proposals for 2018-19. During the meeting Chairman Tax Committee Hamad Masood FCA gave a detailed presentation on budget proposals while it was also attended by elected office bearers of different trade bodies.
Shabbir Hussain Chawla said that these proposals coupled with suggestions provided by various trade associations representing different sectors would be finalised within next couple of days. He told that these budget proposals will be presented to Rana Afzal, State Minister for Finance in a special function to be arranged next week. Appreciating the efforts of Hamad Masood, Chawla requested him to prepare a separate executive summary which could give an overview of these proposals. He also directed R&D cell of FCCI to complete the budget proposal as soon as possible. He said the budget proposals should also inculcate the suggestions provided by different economy sectors.
Earlier, Hamad Masood gave a detailed presentation on Income Tax, Custom, Sales Tax, Withholding Tax and other taxes related to Punjab Revenue Authority (PRA). He demanded to trim the unlimited discretionary powers of tax collectors, adding that he demanded reduction in minimum tax from 1 to 0.5 percent but the government has increased it up to 1.25 percent. He said dispute resolution committees have been constituted but these should be reactivated for true results. He also expressed concern over the most ticklish issue of refund and said the period for the payment of refund claims has been fixed but there is no time limit for the verification of concerned documents and under its garb the payment of refund claims is delayed. He said that government should fix time limit for verification of documents for payment of refund cases within the stipulated time frame. He told that at FBR level, cases are particularly selected for audit on parametric basis but there is no transparent mechanism at commissioner level. Hence there should also be a well-defined procedure for the selected of audit cases. He said that rate of 17 percent sales tax is on higher side. "It should be reduced to 12.5 and then gradually brought down to 10 percent", he added. Similarly the refund should be paid on "first come first basis". Hamid Masood told that decision regarding tax amnesty on foreign assets has almost been finalised. He also stressed the need to rationalise gas tariff across the country, as it was creating disparity among the gas consumers of Punjab and Sindh.
About PRA, he said that its taxes are tantamount to double taxation. Moreover, it has not yet been decided at which stage the tax on services would be charged as an activity is started in one province and is terminated in other province. But the provincial revenue authorities of both provinces are demanding services tax which has over burdened the businessmen. He said that the rate of PRA taxes is 16 percent in Punjab which is also on higher side as compared to other provinces.
He said that it should be brought down in the coming provincial budget in addition to harmonizing it with other provinces.