MCCI seeks abolition of CVT on industrial sector

The Multan Chamber of Commerce and Industry (MCCI), in its proposals for 2011-12 budget, has demanded of the government to abolish capital value tax (CVT) on industrial sector. MCCI office-bearers, including president Shahid Naseem Khokhar, said that the government had levied capital value tax on industrial sector and the tax is meant for commercial and residential areas but this tax is also being collected on industrial plots.
They demanded that CVT should be abolished from the industrial sector. "We are against the imposition of wealth tax because it is a punitive tax that penalises savings and investment and, furthermore, this is a tax that is levied on assets that have been created from money on which tax is already paid. The developed countries, except France and India, do not tax wealth because it is construed as taxing capital formation, asset building and national savings," they said.
Regarding withholding tax, MCCI office-bearers said that the government must pay attention to eliminate advance tax/withholding tax in the coming budget, adding that however if the govt feels any setback in collection of funds, it should be eliminated in phases.
MCCI further said that withholding tax on import is a sort of double taxation (tax on tax), which is totally unjustified and unfair, which also increases the cost of industrial raw materials. The WHT should be calculated on the value of goods, excluding sales tax at import stage and it should not be calculated on the basis of duty paid value by amending section 148(9) of Income Tax Ordinance, MCCI added.
The procedure of income tax refund should be rationalised and should be modelled after sales tax refund procedure; MCCI suggested, adding that this would not only reduce the difficulties of the taxpayers but would also improve the FBR credibility. The MCCI president said that commencement of the centralised system for issuance of NTN has worsened the process instead of facilitating the taxpayers. He said that FBR has provided a facility to apply for NTN both electronically and manually but both options do not help the taxpayers in getting the NTN within the prescribed period of 48 hours. The registration process, which is supposed to be done in hours, has been halted for months because of the applications galore. The situation is so much deplorable that even for minor alteration or change in the existing NTN certificates, taxpayers have to undergo immense hardships and difficulties. Delays in the issuance of NTNs and lack of co-ordination between the FBR, Islamabad and field offices, like Regional Tax Offices and Large Taxpayers Units, are not only depriving taxpayers from getting the tax number within the prescribed time but also deprives the national exchequer of billions of rupees in revenue along tax returns. Under the laid down conditions by the FBR no taxpayer could get sales tax registration without NTN registration. This means that no business establishment could start functioning till it gets NTN and thereafter sales tax registration. This pathetic condition of the FBR and its field offices at the 1st step (ie issuance of NTN), also raises concerns regarding the smooth functioning/handling of detailed assessment procedures.