LAHORE: Federal Finance Minister Asad Umer has pledged to make clubbing of taxes in the Federal Budget to facilitate the businessmen who paying a large number of taxes.
Federal Minister made this announcement on demand of the LCCI President Almas Hyder while speaking at the Lahore Chamber of Commerce & Industry. The LCCI Senior Vice President Khawaja Shahzad Nasir, former office-bearers and Executive Committee Members also spoke on the occasion.
Asad Umer said that business community would be given the facility of single tax collector in the coming federal budget. He said that trust building between government and business community is need of the hour as private sector will be leading economy in the 21st century while government would act as facilitator.
He said that FBR and private sector would have to give honor to each other for trust building. He said that promissory notes for industrial sector was the idea of private sector and it will help resolve the issue of liquidity. He said that cabinet will approve finance bill soon. To a question, he said that interest rate is the matter of central bank saying that savings are a must for sustainable economic development. Last year, saving were only 10.4 per cent that were very low.
These should be 25 to 28 per cent to achieve the annual growth target of 7 per cent. State Bank of Pakistan would have to maintain a balance. He said that industries are provincial subject after 18th amendment. Federal and Provincial government would take stakeholders on board to get their valuable feedback. He said that Special Economic Zones are of utmost importance. “I believe that operations of these SEZs should be in the hands of private sector”, Federal Finance Minister added and said that Information Technology Sector is near to his heart. A task force has been formed and soon a package will be announced for IT sector. He said that Privatization commission has been asked to work with full throttle for loss making public sector enterprises. He said that 11-member board has been formed for “Sarmaya Pakistan” that would have 8 representatives from private sector while remaining will be from the government.
The LCCI President Almas Hyder said that the benefit of the payment of refunds through promissory note should also be extended to all the other sectors in addition to five zero rated sectors. He said that elimination of Regulatory Duties (RD) on all the raw material lines to reduce the cost of doing business and making manufacturing competitive. He said that government should take steps to reduce the interest rate. The recent hike in the SBP policy rate to 10% (highest in five years) has made borrowing highly expensive for private sector and discourages investment that needs debt financing. The Government should rezone urban centres, demarcate industrial land and set up SEZs all over Pakistan. The LCCI President said that the exemption from the payment of Sales Tax on imported plant and machinery for Greenfield projects in the Mini-Budget should also be granted to the brownfield projects for Balancing, Modernization and Replacement of existing units. For the hand-holding of SME sector and enabling it to realize its true potential, the Government should announce a five year Tax Holiday for the new SMEs. He said that Prior notice should be served before the visit of Tax Officials on the premises of business community.
Almas Hyder said that the total number of taxes should be reduced to 6 by clubbing labour related taxes e.g. EOBI, PESSI, WPPF, WWF Professional and Property Tax Federal and Provincial Sales Tax. The frequency of the tax payments of above proposed labor tax (EOBI, PESSI, WPPF, WWF Clubbed) and Sales Tax (Federal and Provincial Clubbed) should be once a year. The frequency of the payments of Corporate Income Tax should also be once a year. This will bring down the total frequency of tax payments to 6 a year.
The services sector (Wholesale & retail trade, Transportation, Storage & Communication, Finance & Insurance and Housing) is the main driver of economic growth in Pakistan with a contribution of 60 percent in the GDP. To enable the services sector to realize its potential in terms of exports, it should be incentivized and included in the priority sectors in the “Trade Related Investment Policy Framework 2015-2023” for export oriented investments. The IT sector in Pakistan has remarkable potential as evident by the increasing number of IT based startups in Pakistan. To enhance the exports of IT sector, it should also be included in the priority sectors for export oriented investments. Appropriate and easy payment solution also needs to be designed for IT sector.
Mian Muhammad Ashraf called for immediate measures for rehabilitation of steel industry, Farooq Iftikhar said that issues of local producers of LPG should be resolved. Mian Anjum Nisar urged the government to allow purchase of land and vehicles to the non-filers. Muhammad Ali Mian said that old industries should also be given same facilities which are being offered to the newly established. Sohail Lashari called for promotion of tourism industry while Shahid Hassan Sheikh called for elimination of Saturday’s off.
Federal Minister of State for Revenue Hammad Azhar said that Standard Operating Procedures (SOPs) are being evolved for issuance of tax exemption certificates. He said that raids at business premises have been ceased and SOPs are being formed in this regard as well. He said that Tax Reforms Implementation Committee is active while tax policy and tax administration are being separated.
Chairman Federal Board of Revenue Dr. Jahanzeb Khan said that FBR reforms are one of the top priorities of the government for trust building. He said that litigation is nothing else but waste of time and capital. He said that alternative dispute resolution mechanism is being promoted to settle the issue out of court. He said that Lahore Chamber will be FBR’s partner in this regard. He said that Tax-to-GDP ratio would have to make better.
Provincial Minister Mian Aslam Iqbal said that draft of industrial policy has been approved by the cabinet. Work on Quaid-e-Azam Apparel Park on 1500 acres and Special Economic Zones is well on the way. Cabinet has also passed labour deletion policy while rules and regulations for land lease policy would be forwarded to the cabinet for approval soon.
