ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has presented its recommendations and proposal for the next fiscal budget for the country.
The PTI is all set to present its third budget. The government has decided to convene a session of the National Assembly on June 11 to table the budget for the financial year 2021-22. The session was convened after the Adviser to the Prime Minister on Parliamentary Affairs Babar Awan met with Speaker Asad Qaiser.
The recommendations of the ICCI are as following:
Government should especially consider the prevailing circumstances of Covid-19 whilst devising the budget and there should be no new form of tax or any addition in the tax in order to save the economy from further contraction and help preserve the livelihood of the business community.
Tax Return Form should be simplified before 30th June 2021, as it relates to past tax year, orientation should be provided to the general public and the trader/retailer community.
A fixed Tax rate of 2 percent must be introduced in order to encourage new taxpayers which will be encouraged through incentives and old taxpayers should be respected and facilitated by adding taxpayer’s counters on all state own departments across the country.
Turnover/minimum tax across the board to be reduced on all manufacturing sectors from 1.5 percent to 0.5 percent. There should be no minimum taxes for any sector.
Import and customs duties on all products must be reduced, especially products related to plant, machinery and all products related to construction, real estate, tourism, medical, agriculture or any industry related sector. Growth in these industries especially value addition through a transfer of technology is dependent on the duties structure.
Import duties on luxury goods and vehicles must also be reduced significantly.
GST should be brought down to at least 5 percent without input tax adjustment in order to help stimulate the ailing economy and reduce production as well as high inflation.
Additional sales tax of 3 percent on industrial raw material should be removed to facilitate revival and growth of industrialization.
Government should waive off GIDC from gas bills of industrial and captive connections to ease difficulties of industries and commercial entities.
The government of Pakistan should expedite the release of export rebates under SRO-748 (Non-Textile Sector). The current situation does not allow a 10 percent growth in exports. GOP should consider releasing of remaining rebates which are on hold based on 10 percent growth on yearly exports.
The government of Pakistan should expedite the process of payment of all refunds including income tax, sales tax and duty drawbacks. Government must also allow adjustment of payable taxes against accumulated refund claims which would address the liquidity issues of businesses and help the government improve collections.
The highest slab of tax on business individuals, AoPs and on rental income of up to 35 percent which is very high and encourages tax evasion must be reduced to 10% and would promote tax culture, reduce shop and office rents and help improve tax revenue for the government as well.
Electricity costs are a major issue for all business and therefore it is proposed to decrease per unit cost of energy by Rs5/- to encourage a revival of all industries and increase competitiveness with world markets.
RTOs, CTOs & LTOs should provide proper facilitation to taxpayers in order to avoid a lengthy process. Further, agreed assessment should be implemented and departments should start the process of this.
Audit cases should be concluded within 6 months after issues notice. The audit should be simplified and it should be done once in three years. Furthermore, an audit of sections 161 & 205 should be done once in three years and should not be repeated with section 177 has been conducted or is concluded.
Account attachment condition should only be exercised after the finality of the decision.
The refund mechanism should be smoothed and automated. Further, 153-1B refunds cases were rejected, it should be reviewed.
Lastly, the chamber proposed harmonization of provincial sales tax with federal sales taxes, a reduction in gas and electricity taxes, while also establishing an EXIM Bank of Pakistan and keeping the policy rate below 6 percent.