KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) have submitted comprehensive taxation proposals to the Chairman, Federal Board of Revenue (FBR) for inclusion in the Federal Budget 2015-16, which is to be announced on May 29, 2015. The OICCI budget proposals cover over 100 wide-ranging recommendations, including proposals to incentivize investors, broaden the tax net through documentation of the economy, simplify the tax system and reorganize the FBR, and many industry specific proposals. With key focus on promoting large investment in the economy especially FDI, OICCI taxation proposals state that policies which lead to longer term investment plans should be suitably protected for at least a 5 year period so that investors could base their plans on policies which are consistent and predictable. Incentives recommended to make new investments attractive, include increase of tax credit under section 65A of IT ordinance, rebate for entities issuing electronic invoices to curb “flying invoices”, extension of tax credit under Section 65B till June 30, 2018, credit under Section 65C @15% to be given for 3 tax years from year of listing, credit under Section 65 D to be extended to industrial undertaking setup till June 30, 2018 and credit under section 65 E to be extended to installation of plant and machinery till June 30, 2018. To attract new FDI, upfront levy of withholding Income and Sales Tax at import stage on plant and machinery should be exempted for new foreign investment. OICCI has proposed that there should be only two tax regimes for companies assessed under Large Taxpayers Units (LTU) or those registered under Sales Tax Act: the normal tax regime based on Taxable income or under the Alternate Corporate Tax (ACT) mechanism. The assessee should be given the option to opt for one of the two regimes and this option taken should then be made binding for 5 years. Minimum Tax Regime (MTR), should be withdrawn on OMCs, refineries, LNG terminal operators, etc where the application of MTR is resulting in an effective tax rate of over 50%. To avoid delays in processing income tax and sales tax refunds OICCI has proposed that time frame for scrutiny of these refunds should be legally reduced to 30 days. All current refunds should be released against a bank guarantee before 30 June 2015, followed by an audit of those refunds. OICCI has also given very detailed proposals for broadening the tax base and Identifying new potential taxpayers. OICCI recommends that all income earners should pay taxes equitably, including on income from agriculture related activities and all kinds of government and banks saving schemes. All income earners, without exception of any sector, should be registered with proper NTN. Tax authorities should ensure that all NTN holders file annual income tax / wealth returns and wealth reconciliation statements. The culture of Amnesty Schemes should be completely eliminated as it discourages the honest tax payers. Severe, and visible, penalties should be enacted in the law to punish tax evaders. In respect of Sales tax OICCI has proposed that Sales tax rates should be reduced in line with the regional countries to about 12 %. It also proposes current Sales tax regime of VAT mode should be reviewed and in case enforcement is not possible Sales tax should be levied in non-VAT mode with a maximum rate of 4%, and input tax adjustment provision withdrawn without compromising on documentation. OICCI has stated that currently over 85% of tax collection is through WHT which is very high and must be reduced. Companies registered in LTU/listed on the KSE should be exempt from WHT on imports of raw materials & capital goods or WHT on import of raw materials & capital goods should be reduced to 1%. OICCI has once again pointed out that FBR should immediately de-notify the services which are now chargeable under the provincial legislation after the 18th constitutional amendment.