RAWALPINDI: The Rawalpindi Chamber of Commerce and Industry (RCCI) has submitted to the Federal Board of Revenue (FBR) a set of proposals for consideration and incorporation in the federal budget for 2016-17, stating that these proposals would help increase economic activity and broaden the tax net thus increasing revenue.
RCCI President Mian Humayun Parvez in a statement said the proposals categorized income tax, sales tax and import and export duties with special focus on documentation of the economy.
Key proposals in the category of income tax relate to broadening the tax base, it was suggested to set up a business Registration Authority.
Chamber membership should be made compulsory for businesses operating all over Pakistan.
This Step would eventually lead to centralize tax related data for and broaden the tax net. Broadening the concept of enhanced/ reduced rate for filer and Non-filers. Reduction in the rate of income tax has also been sought. Corporate tax to be brought down to 25%, currently stands at 33 %.
Pakistan’s corporate tax rate is third highest in world. Sales Tax rate be reduced to single digit gradually. It is proposed it should be reduced to 5%.
Government should take additional measures to give incentives for exports and take measures to lower cost of doing business and improving the overall regulatory regime to facilitate exports.
RCCI suggested to address the issue of massive under-invoicing / dumping of imported products. Import value be fixed in consultation with industry. The rate of Advance
Tax on imports under Section 148 Manufacturers importing raw materials needs to be reduced to 1%.
Government should convert Youth loan scheme into a venture capitalist Scheme.
It is suggested to reduce the duty on coal import, 0% so that the cement industry can flourish.
IT industry is concentrating its base however, a lot needs to be done for its stability.
IT companies which export software be exempted from taxes till 2016, extension of subsidy is suggested.
RCCI President said we have been urging the government to curb smuggling as it is denting the economy badly.
The revenue growth is already facing the dent of $2.5 billion loss yearly due to smuggling.
All major items like mobile phones, tyres, diesel, tea, plastic, steel sheets, vehicles, autoparts, cigarettes, garments and electronics (home appliances) are among smuggled goods.
This has put a negative impact on revenue, industrial production, investment and employment generation.
A concentrated efforts and checks must be placed in budget to monitor smuggling, he suggested. APP