Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and United Business Group (UBG) on Wednesday jointly presented a set of 40 pre-budget proposals to Federal Finance Minister Asad Umar seeking special package of incentives to accelerate the pace of economic activities. The proposals also demanded of the government to curtail discretionary powers of the tax collectors in addition to relief in taxation, duties and income tax as well as broadening tax base on top priority.
FPCCI President Engr Daroo Khan Achakzai unfolding the salient features of proposals to media here on Wednesday said that government was urged to revamp taxation system on modern line to accommodate the business community. "The objectives of the proposals are revamping taxation system, documentation of economy, employment generation through industrialization, promoting a responsive and equitable taxation system, infrastructure development and trickledown effect of the fiscal space to the grass root level.
He said the government should reduce sales tax rate gradually from current 17 percent to single digit, to abolish all duty and taxes on the imports of all machinery, to reduce further tax on unregistered person from three percent to one percent and imposition of taxes on final goods. He proposed that customs duties on all raw materials should be reduced to low or zero.
The government must eliminate regulatory duties and additional customs duty on raw materials so that the local industry could compete with the smuggled items and mitigate the effect of low tariff free trade agreements. He said before giving final shape to proposals, all affiliated chambers, trade bodies, associations and 20 members high level core committee of United Business Committee were taken into confidence.
About current economic situation, FPCCI president showed his serious concern over the rising policy rate, increase in petroleum product prices, decline in foreign investment and devaluation of Pakistan rupees. Speaking on the occasion, UBC Chairman Iftikhar Ali Malik said that the joint proposals would help make budget document business-friendly, which would ultimately result in robust export-led growth.
"The government is presently facing shortage of tax revenue and projected that economic growth rate may be declined to 3.7 percent which may enhance unemployment rate and poverty in Pakistan. Around 1.2 million people pay taxes in Pakistan while the number of traders paying tax on electricity bills surpasses seven million, this gap can be bridged through sincere efforts backed by the government," he added. He suggested that government should use the data of domestic and international travellers for identifying potential tax payers and bringing them into tax net.
He underlined the need of promotion of SMEs culture in Pakistan and suggested that the government should formulate mechanism for monitoring consumer goods prices. He said the government should take the business community into confidence regarding any agreement with IMF and should make it public so that all stakeholders should be aware of its conditionality.