The budget for the year 2012-13 must be focused on energy sector as country’s economic revival hinges on availability of cheaper and uninterrupted power and gas supply. This was the crux of the LCCI Budget proposals for the year 2012-13, finalized after getting feedback from various sectors. Almost all the sectors called for immediate measures to bridge electricity demand-supply gap. Irfan Qaiser Sheikh said that austerity should be the theme of the budget document and for the purpose the government would have to cut off the unnecessary expenditures as excessive government borrowing was not only resulting in higher interest rates but also restricting availability of cheaper liquidity for the private sector. The LCCI President urged the government to broaden the tax net by bringing the agriculture and services sectors into the tax net. Public Sector Enterprises (PSEs) like PIA, Railways and Pakistan Steel Mills, generating a loss of Rs. 400 billion annually should be managed professionally or be privatized to avoid the huge loss to the national exchequer. The SRO 111 about whitening of capital through TT must be withdrawn in order to promote tax culture and broadening of tax net. Annex “D” should be abolished From the Income Tax return. The government should withdraw SRO 191 immediately. Rate of minimum income tax of 1% of turnover under section 113 is too high. It is suggested that rate be reduced to 0.5% of the turnover. Minimum Turnover Tax u/s 113 shall not be levied on entities which are bearing loses. If, however, government intends to apply the minimum tax rate, it should not exceed previous 0.5% tax of the turnover. While 0.2% rate should be applied on distributors, whole sellers and retailers, due to their very thin margin of profit. Corporate tax shall be reduced to 25% from 35% for limited companies quoted on stock exchanges. The rate of withholding tax on contracts should be reduced to 1 percent. The basic exemption limit for income tax should be raised to Rs.500,000/- which is in line with the overall inflation of our economy and rising prices of consumer products. The WHT at imports U/S 154 is different for Commercial and Industrial Importers which creates an imbalance and opens room for corruption. LCCI demand that WHT should be equalized for both commercial and industrial importers @ 3%. Presumptive income should be allowed and withholding tax should be adjustable. Turnover Tax be reduced from 1% to 0.2% for the indigenous seed industry/companies. There should be no Sales Tax on import and local supply of plant and machinery. All taxes should be waived off on I.T based items:- The LCCI recommends that the Sales Tax on Agricultural Diesel Engine shall be reduced in the same manner as it has been reduced on agricultural tractors from 16% to 5%. It is proposed that government should bring down custom duty on light truck tyres from 20% to 15%. Custom duty on all raw materials of tyre manufacturing should be reduced to 5%.The LCCI strongly recommends that government should bring down custom duty on all plastic raw materials, which are not produced in the country to 5%. Grand Parent Stock is basic seed/raw material for poultry sector; its import should be allowed as duty free instead of 5% duty, being charged presently. To impose 15% duty on the import of broiler parent stock or hatching eggs to produce broiler parent stock day old chicks. Duty free Import of fertilizer raw materials should be allowed into Pakistan. LCCI strongly recommend that there should be absolute Exemption of Sales Tax and Custom Duties on import of industrial raw material and plant & equipment. Paper & paperboard should be categorized as a semi-finished raw material for the printing, Converting and Packaging Industry and as such import duty of Chapter 48 be brought down to 5% in existing duty. LCCI President urged the govt to fix the duty of Digital Camera up to Rs. 500-. Through this, legal import & proper documentation will start with better revenue to the Govt of Pakistan. It is proposed that, 5% custom duty be charged on import of PET bottle scrap only.
