LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has congratulated the newly-appointed Chairman Federal Board of Revenue (FBR) Asim Ahmad and invited him to visit LCCI to share his future plans with the business community.
LCCI President Mian Nauman Kabir said that the business community has attached high hopes with the FBR new chairman. He said that the new chairman would have to utilize his best abilities to facilitate the businessmen who are generating revenues for the government despite all odds.
He said that the FBR chairman would also have to take special measures to resolve the issues being faced by the business community.
Mian Nauman Kabir said that the private sector is the engine of growth and its proposals must be the part of federal budget 2022-23. He said that in developing countries, the private sector generates 90% of jobs, funds 60% of all investments and provides more than 80% of government revenues. In this regard, feedback from the private sector plays a fundamental role in formulating appropriate policies for the trade, industry and economy. The robust linkage between the government and private sector boosts the economy, creates the friendly environment, generates employment, attracts investment and helps in the growth of SME sector.
He said that being premier Chamber of the country, the Lahore Chamber of Commerce & Industry has formed a set of proposals for the Federal Budget 2022-23.
Kabir said that Pakistan’s tax base is narrow. Out of total population of 220 million only around 3 million people are filing their income tax returns. He said that all the persons having industrial or commercial electricity or gas connections should be brought into the tax net.
He said that SMEs are backbone of the industry. There are up to 5.2 million SMEs in Pakistan with 25% share in exports and 30% contribution in GDP. Considering the vital role of SMEs, the turnover threshold for definition of SMEs may be enhanced to eight hundred million rupees net of Sales Tax, FED and discounts.
The LCCI president said that Customs Tariff Rationalization is need of the hour. To protect and promote local industry and for import substitution Customs duties on import of raw material may be reduced to minimum or zero percent. Similarly, import of finished products and luxury goods may be discouraged through levy or enhancing the regulatory duties.
The LCCI president said that FBR granted Sales Tax and Income Tax exemptions to industries based in erstwhile FATA/PATA in 2018 on imports of certain raw materials for their consumption under SROs 889(I)/2018, 890(I)/2018 and 1213(I)/2018. Further, exemption of FED has also been granted to the industries based in erstwhile FATA/PATA w.e.f 1st July 2021.
These raw materials are imported and sold in Punjab which results in heavy Tax Evasion. This misuse is seriously hurting the regular industries based outside FATA/PATA especially the Foam Industry and Steel Melters etc. This matter requires immediate attention to address the problem.
Mian Nauman Kabir said that the imposition of 17% Sales Tax through Finance Supplementary Act 2022 (Mini Budget) on items like capital goods, plant, machinery and equipment, raw material (EPZs have also not been spared) Effluent Treatment Plants (ETPs), Renewable Energy (Solar, Wind, and Geothermal) equipment, healthcare products, hybrid seeds, bovine semen, animal and fish feed, Flavoured milk, yogurt, cheese, butter, cream, Desi ghee, whey, Milk and cream, ingredients of poultry feed and other agricultural products caused inflation, have increased cost of doing business, compromised ease of doing business and increased cost of goods for end consumers. The tax rates should be rationalized.
He said that Chambers of Commerce & Industry fulfill all the criteria prescribed for a charitable organization and are providing services to the business community for promotion of trade and industry. This position has also been accepted by ATIR. FBR is requested that Chambers of Commerce & Industry, be included in Sub clause (1) of Clause 66 of part I of Second Schedule to Income Tax Ordinance, 2001 for Exemption of Total Income. Mian Nauman Kabir said that tax laws, procedures and returns should be simplified. One page return form should be introduced.
