Karachi - Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted comprehensive taxation proposals to the Chairman, Federal Board of Revenue (FBR) for inclusion in the Federal Budget 2015-16, which is to be announced on May 29, 2015. OICCI budget proposals cover over 100 wide-ranging recommendations, including proposals to incentivise investors, broaden the tax net through documentation of the economy, simplify the tax system and reorganise the FBR, and many industry specific proposals.
With key focus on promoting large investment in the economy especially FDI, OICCI taxation proposals state that policies which lead to longer term investment plans should be suitably protected for at least a 5 year period so that investors could base their plans on policies which are consistent and predictable.
OICCI has proposed that there should be only two tax regimes for companies assessed under Large Taxpayers Units (LTU) or those registered under Sales Tax Act: the normal tax regime based on taxable income or under the Alternate Corporate Tax (ACT) mechanism. The assessee should be given the option to opt for one of the two regimes and this option taken should then be made binding for 5 years.
To avoid delays in processing income tax and sales tax refunds OICCI has proposed that time frame for scrutiny of these refunds should be legally reduced to 30 days.
The culture of Amnesty Schemes should be completely eliminated as it discourages the honest tax payers. Severe, and visible, penalties should be enacted in the law to punish tax evaders. In respect of Sales tax OICCI has proposed that Sales tax rates should be reduced in line with the regional countries to about 12pc.
OICCI has stated that currently over 85pc of tax collections is through WHT which is very high and must be reduced.
Companies registered in LTU/listed on the KSE should be exempt from WHT on imports of raw materials & capital goods or WHT on import of raw materials and capital goods should be reduced to 1pc.