Amendment to SRO 1125(I)/2011 proposed in budget 2014-15 to charge sales tax at the standard rate of 17 per cent on the import of finished articles of leather and textile will promote smuggling culture in Pakistan. Talking to Business Recorder, chairman Pakistan Economic Forum (PEF), Muhammad Arshad Jamal, said that the proposed amendment to SRO 1125(I)/2011 would encourage smuggling and added that this decision would also cause severe dip in the imports of finished articles of leather and textile.
He said that reduction in maximum rate of tariff and tariff slabs from 30 percent to 25 percent would not help importers, as federal government had proposed tariff reduction in those items, which already had tariff @ 25 percent. Meanwhile, Vice President Pakistan and Karachi Tax Bar Associations Muhammad Zubair said that federal government instead of imposing one percent withholding tax on return filers and two percent on non-filers on the purchases of land should have strongly recommended provincial governments to increase collector rate to reasonable level. He said that imposition of withholding tax on taxpayers was unjustified as they were already required to adjust it in their tax returns.
He said that initiative to collect adjustable advance tax @ 7.5 percent on the monthly bill of Rs 100, 000 and above from the domestic electricity consumers was laudable but tax authority should ensure bringing these domestic electricity consumers into tax net.
He said that although the withdrawal of income support levy was a positive step, federal government should have allowed refunds to those taxpayers, who were charged this levy. Abdul Qadir Memon, former president, Pakistan Tax Bar Association, said that federal government should have withdrawn exemptions on foreign remittances in this budget, as these exemptions had played a major role in creating parallel black economy in the country.
Saleem Kassim Patel, senior vice chairman, Association of Builders and Developers of Pakistan (ABAD) said that they had high expectations but the government did not take major initiatives to promote construction industry. He further said that decisions of restructuring HBFC and allocation of Rs 20 billion for low cost housing scheme were appreciable.