LAHORE - Prime Minister’s Advisor on Revenue Haroon Akhter Khan has said that the ministries concerned are seriously considering the LCCI budget proposals.

While talking to LCCI President Sheikh Muhammad Arshad, Prime Minister’s advisor said that the economy is moving in right direction and this fact is being recognized by international donor and financial institutions.

Haroon Akhter said that business community is backbone of the economy and government is fighting hard to solve the issues of trade & industry at the earliest. He informed the LCCI president that government is making all out efforts for the cause of business community in the country. He also lauded the LCCI role for supplementing the government efforts aimed at economic revival of the country. LCCI President Sheikh Muhammad Arshad said that the LCCI budget proposals for the financial year 2016-17 have been formed after taking feedback from the stakeholders.

He said that China-Pakistan Economic Corridor (CPEC) has the potential to stimulate the local economy through increase in the demand of locally manufactured goods. Such increase in demand will not only allow the full utilization of existing manufacturing capacity but will also encourage the manufacturing to increase their capacity. This will generate much needed employment opportunity.

LCCI President said that elimination of harmful taxation that hinders business and trade in the country is need of the hour. He said that as an essential element of good governance, Pakistan lacks culture of tax compliance. There is, therefore, an urgent need to reform the taxation system by engaging all the stakeholders. He said that withholding tax should be reviewed and tax credit should be given to withholding agents performing state duties. This tax credit should vary in slab based on withholding tax deducted and deposited by withholding agents.

“There is need to develop a comprehensive, fair and transparent system for audit. He said that selection of audit should be made on the basis of parameters by FBR through random balloting. The powers of Commissioner for selection of audit should be withdrawn by amending section 177. He should, however, conduct audit after the selection by FBR. Moreover, capacity of the tax officials/auditors should be developed through training etc”, the LCCI President added.

He said that all the backlog of refunds should be cleared within two months of the filing of return. This one time clearance would clear the backlog. He said that banking bonds may be issued for large amount of refunds withheld since years. He said that income and sales tax refunds should be issued without application within 90 days of their becoming due.

Call to rationalise taxes

to curb smuggling

The business community on Friday asked the government to rationalise taxes and duties to check smuggling and enable the business community to cope with multiple internal and external challenges in the upcoming budget. He said that the menace of smuggling has spread its tentacles and needs to be curbed with iron hand. PIAF Chairman Irfan Iqbal Sheikh said that government should take additional measures to incentivize exports, taking other measures to ease the cost of doing business and improving the overall regulatory regime to facilitate exporters.

He suggested that there is a need to address the key issue of massive under-invoicing/dumping of imported product. Import value is fixed in consultation with industry. The rate of Advance Tax on imports under Section 148 – Manufacturers importing raw materials needs to be reduced to 1%.

Government should convert the Youth loan scheme into a venture capitalist Scheme. Pakistan lacks infrastructure to facilitate foreign investment, it is suggested to reduce the duty on coal import, 0% so that the cement industry can be flourished.

IT industry is concentrating its base however, a lot to do for its stability as an industry. IT companies who export softwares are exempted from taxes till 2016. An extension of such subsidy is suggested. A concentrated efforts and checks must be placed in budget to monitor smuggling, he suggested. He hoped that the government would allocate special funds for the construction of water reservoirs in the country.