LAHORE - While identifying power shortages and inflation as two key challenges being faced by the economy, the Lahore chamber of Commerce and Industry (LCCI) and Associate Chartered Certified Accountants (ACCA) Thursday called for a long-term strategy to create opportunities for investment, industrialization and employment generation.

The consensus was developed at a pre-budget discussion organized by ACCA Pakistan at Lahore Chamber of Commerce and Industry with an aim to contribute its research and insight towards healthy fiscal measures in the country.

The discussion was moderated by LCCI President Irfan Qaiser Sheikh, Chief Commissioner, LTU Mustafa Ashraf, President Pakistan Tax Bar Association Zulfiqar Khan, former LCCI EC member Shahzad Azam Khan, Muhamamd Awais, Irfan Ilyas and Muhammad Arshad. Head ACCA Arif Masud Mirza opened the event. Each participant came in with unique perspective and spoke passionately about budget recommendations.

The Speakers were of the view that the solution to slow economic growth lies in the revival of taxation policies and improved tax collection system.

The ACCA and LCCI drew policy makers’ attention to meltdown being witness by all the segments of the economy.

The LCCI President Irfan Qaiser Sheikh brought in the views of the business community saying that 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.

Rate of minimum income tax of 1 per cent of turnover under section 113 is too high. It is suggested that rate be reduced to 0.5 per cent 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 per cent tax of the turnover. While 0.2 per cent 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 per cent from 35 per cent for limited companies quoted on stock exchanges. The rate of withholding tax on contracts should be reduced to 1 percent.

Mustafa Ashraf brought in the policy makers perspective. ACCAs moderator bridged the gap and differences between the two to ensure that workable recommendations could be drawn.