KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed the government to bring sales tax rate down to seven percent from the existing 17 percent
FPCCI said the standard sales tax of seven percent should be non-adjustable and non-refundable and it should be collected at the single stage of import and/or at manufacturing, except high tax earning sectors for the government, including petroleum products, energy, telecom, tobacco and liquor.
In the value-added chain industry, the sales tax may be collected at 0.5 percent at each stage of value addition. “However, since a single digit sales tax rate would require a lot of time for massive amendments in the Sales Tax Act 1990 the standard sales tax rate may be reduced to 15 percent in value-added tax mode at first stage and thereafter reduced gradually by one percent annually,” the apex trade body said in its budget proposals for the next fiscal year of 2018/19.
FPCCI said the prevailing sales tax rate is too high and major part of it is refunded or adjusted and net tax in the kitty of government comes to around five to six percent.
