The Lahore Chamber of Commerce and Industry (LCCI), on Friday, unequivocally rejected the government’s plan to impose a wealth tax, while it called for a downward revision of the General Sales Tax (GST) to 12 percent. In addition, it demanded that sectors including agriculture should be brought under the tax bracket. These demands were raised at a pre-budget press conference, which jointly addressed the LCCI President Shahzad Ali Malik, Senior Vice President Sheikh Mohammad Arshad, Vice President Sohail Azhar and former Senior Vice President Abdul Basit. The LCCI office-bearers said that essential food items, their raw materials, pharmaceutical products, their raw materials and educational material including stationery and printing paper should not be taxed.
They also called for a minimum rate of duty on the import of raw materials, along with well-targeted measures to discourage import of finished products. This, they believed, would help promote domestic trade and industry. They urged the government to rationalise levies on oil products as the fast rising oil prices have had a negative impact on the economy and have hit all sectors alike. They claimed that a dire need to focus on the construction of water reservoirs was imperative to ensure cheaper electricity and continuous energy supply. They also stipulated on withdrawal of an increase in turnover tax and a 25 percent flat rate of tax on AOPs.
The LCCI office-bearers urged the government to bring down the interest rate to single digits in order to expedite the process of industrialisation. They maintained that the taxable limit for income tax should be increased to Rs.400,000. They asked the government to introduce an electronic system for income tax, similar to the system for the refund of sales tax. They also proposed that all compliant and regular taxpayers shall be exempted from audit. The tax department must not start process of audit at a time when the refund is determined. They asked the FBR to settle down concrete audit parameters in consultation with the business community.
They asserted that, in order to broaden the tax net, no new commercial utility connection shall be allowed without a valid NTN. The customs department treats importers differently at various ports and airports. A variance of rules at Karachi and other cities is visible. In addition, the policy about the loose cargo is also not same on the two ports. Furthermore, ‘CARE’ system of clearance shall be applied to other cities as well. Companies, falling under the purview of Large Taxpayers Unit (LTU), have to bear brunt of repeated or frequent audits. Currently, no compensation is allowed on holding back due refunds, while the business community should be compensated if their due refunds are held back without any cogent reason. In case a supplier defaults, the buyer shall not be held liable if payment is made through cross cheque. It is very unprofessional to punish the buyer, in case of a sales tax default of the supplier.
It is also proposed that ADRC of sales tax should be revitalized. The sales tax input claimed by the buyer should be admitted if the supplier is not blacklisted at the time of making that claim or within six months. No arrest or FIR shall be registered against a taxpayer without giving him a show cause and the chamber should also be taken into confidence. And for this, the adjudication officer should not be below the rank of an additional commissioner. Officials urged the FBR to settle down concrete audit parameters in consultation with the business community. The housing sector, particularly the cooperative sector should be encouraged and should be promoted to boost up the construction industry and to generate employment. It was proposed that infrastructure bonds (as India did) shall be introduced to develop infrastructure in the country, while tax credit shall be given on these bonds.
LCCI denounces wealth tax
