LAHORE - The Lahore Chamber of Commerce & Industry has urged the government to withdraw amendment in Finance Act 2016 to change the definition of input tax to exclude sales tax paid under respective provincial laws.
In a statement issued here, LCCI President Sheikh Muhammad Arshad, Senior Vice President Almas Hyder and Vice President Nasir Saeed said that the amendment would cause dual taxation in the country as indirect taxes paid to provinces shall not reduce the incidence of sales tax paid to federation. Moreover, they said, input tax adjustment will not be available, if the supplier has not declared such supply in his return or has not paid tax due as per his return. Consequently, an eligible input tax shall become inadmissible for the buyer only for the reason that supplier of goods has not declared such supply in his return of sales tax or has not paid the tax due.
They said that government should withdraw amendment as a buyer would not have control over the conduct of supplier. This adjustment would increase cost of production and also make our products uncompetitive internationally.
LCCI Senior Vice President Almas Hyder said that 2 percent further tax under section 3(1A) is charged from commercial importers on sales made to unregistered persons. He said that it is a matter of fact that 2 percent further tax is also borne by importers as it is very difficult to recover the same from unregistered customers due to cut throat competition and smuggling. He said that it is responsibility of government to register the businesses with tax department whereas registered businesses are constantly penalized for being in the tax net.
He said that government should not charge 2 percent further tax as it will not only cause huge revenue loss to the government but would also lead to boundless harassment and corruption. Moreover, commercial importers already pay sale tax at higher rate of 20% (17%+3%) at import stage.
The LCCI office-bearers said that government should take prompt action and resolve these issues at the earliest as business community is already facing number of problems. They said that issues like energy shortage, large numbers of duties & taxes, delay in payment of refunds, smuggling, raids in markets, withholding tax on banking transactions, bank account attachment and Punjab Infrastructure Development Cess etc have already posed various challenges for the business community while measures like amendment in Finance Act 2016 for changing the definition of input tax to exclude sales tax paid under respective Provincial laws would add to their miseries.
They said that private sector should be facilitated and given breathing space so that he could be play due role in economic uplift of the country. The LCCI office-bearers hoped that Federal Finance Minister Ishaq Dar would take notice of the situation and withdraw Finance Act 2016 proposal to amend definition of input tax to exclude sales tax paid under respective provincial laws.
ICCI lauds tax incentives for industry in budget
INP from Islamabad: The Islamabad Chamber of Commerce and Industry (ICCI) has welcomed the tax incentives announced for industry in the federal budget 2016-17 and hoped that the incentives would help industrial sector achieve better growth. Atif Ikram Shekh, President, and Sheikh Pervez Ahmed, Senior Vice President, Islamabad Chamber of Commerce and Industry said that industrial sector was the second largest sector of the economy as it contributed more than 13 percent to GDP and provided employment to more than 15 percent of the total labor force. Therefore, the industry needed better focus and priority attention of the government to address its issues in order to put the country on the path of sustainable economic growth. They said that budget 2016-17 has announced some good incentives for the industry, which was encouraging.
They said enhancing tax credit period on purchase and installation of plant and machinery for BMR from June 2016 to June 2019, reducing the condition of 100 percent equity to 70 percent for establishing new industry or expanding existing plants along with allowing 70 percent tax credit and extending tax credit period up to June 2019 were the positive steps in the budget.
They said increasing tax credit from 1 percent to 2 percent for every 50 employees employed by an industrial undertaking and extending date for setting up of industrial undertakings from June 2018 to June 2019 would also help in reducing unemployment and promoting industrialization.
Atif Ikram Sheikh said that countries like South Korea, Singapore, China, Japan, Malaysia and many others have achieved accelerated economic growth by promoting their industrial sectors and Pakistan should also create conducive environment for industry in order to create new jobs, improve productivity, enhance exports and emerge as a strong economy of South Asia.