KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed cascading and rationalization of Customs tariff to promote industry and provide them with a level playing field.[the_ad id=”31605″]Speaking at a press conference, President FPCCI Daroo Khan Achakzai informed that the proposals had been prepared with the input from all the member chambers and associations. Criticizing the government for the failure in improving economic fundamentals and boost investor confidence, President FPCCI hoped that the government would consider the proposals for upcoming Finance Bill.
“The duty on primary raw material, secondary raw material, intermediate goods, semi-finished goods and finished goods should be levied on the basis of cascading duty structure,” Zubair Tufail Vice President FPCCI said.
“All the capital goods (plant and machinery) are ultimately used by the industry, therefore, there should be a zero percent duty on import of capital goods for all industrial concerns as well as commercial importers.”
According to FPCCI Budget Proposals, the total impact of taxes and duties on smuggling prone items should be reduced to the extent where the incentive of their smuggling is removed.
FPCCI also proposed fixation of value of goods, which are prone to under-invoicing, to discourage mis-declaration and under-invoicing.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed gradual reduction in sales tax rate to single digit among other recommendations aimed at improving ease of doing business and promote investment.
According to the budget proposals unveiled, FPCCI has recommended to reduce standard sales tax rate to 13 percent in VAT mode at first stage to align it with Sindh Sales Tax and thereafter reduce it gradually by 1.0 percent annually to single digit.
FPCCI office bearers opposed the discretionary power accorded to tax officials and recommended that power for recovery of arrears and attachment of bank accounts should be exercised unless the case under litigation has undergone two appellate proceedings at least.
The sales tax on textile machinery has already been made zero rated. FPCCI proposed that in line with the policy to support and promote industrialization, sales tax of 10 percent imposed on import of all machinery for new and existing units should be exempted or reduced to zero percent. Moreover, there should be no income tax or custom duty on these imports.
Achakzai said that the issue of stuck-up refunds should be settled immediately and a mechanism should be made to avoid piling up of refund claims. “Finance Minister had promised that sales tax refunds of Rs80 billion would be settled through issuing bank discountable promissory notes, but there had been no progress on the notes. All refunds including DLTL, income tax and duty drawback should also be included in promissory notes scheme to overcome financial crunch to ensure availability of working capital.”
Criticizing the economic management by the government, Zubair Tufail said the business environment had deteriorated and a sense of fear and uncertainty prevailed among the masses including business community. “All the policies of interest rate hike, currency devaluation, rising cost of utilities have been counterproductive. On top of that, the institutions such as FBR, FIA, NAB are harassing the traders and industrialists.”
Tufail said government could not blame previous regimes for everything as they knew the economic fundamentals the time they came in power. “It is now their job to being improvement as they are responsible for deterioration.”
FPCCI proposed that for broadening of tax base and to improve tax to GDP ratio, the data developed by NADRA and FBR should be used to identify potential taxpayers.
FPCCI also proposed to bring down corporate tax rate from 29 percent to 25 percent for big corporate, and 20 percent for smaller companies to enable them compete globally.
Senior Vice Chairman FPCCI Mirzqa Ikhtyar Baig expressed concerns on rising cost of doing business and urged the government to create a business friendly atmosphere in the country.