KARACHI (APP) - The Karachi Chamber of Commerce and Industry (KCCI) has despatched suggestions regarding anomalies in the federal budget 2010-11 to the government authorities and the opposition for possible solutions and removal of irregularities. KCCI president Abdul Majid Haji Muhammad told APP here Friday that these suggestions have been proposed to the authorities on the basis of proposals received at the recently held meeting at premier chamber last week. He said that a meeting to discuss these anomalies with Finance Minister Dr. Hafeez Shaikh will be held next week in Islamabad. We have sent these suggestions to top authorities in the government, FBR and opposition leaders including Mian Nawaz Sharif. He said the reservations encapsulated the newly proposed Income Taxes, General Sales Tax, Federal Excise Duty and Customs measures. KCCI president said that the businessmen have suggested to defer the imposition of Value Added Tax (VAT) for at least three years as it will serve as a mini-budget and further fuel inflation in the country. He said that businessmen have appealed that advance tax imposed on banking transaction as per Section 231 AA should be limited to cash withdrawal and should not be applicable to NTN holders and active tax payers. It has created confusion that whether the tax is imposed on all banking transactions, when government duties and taxes are paid. Moreover, the withholding tax imposed on imports which was increased by 100 pc last year and further increased this year by 5pc should not be more than 3pc. On Advance Tax; Section 147, KCCI suggested that an individual should not be put in advance tax regime and date of submission of tax return as per previous set up be sustained. On the virtue of the recent budget, an individual having a turnover of Rs 50 million or above should be withdrawn. On the Minimum Tax Payable Extended to Individual and Association of Persons (AOPs), KCCI suggested that it should be removed and minimum tax should be reduced to 0.1pc for the distribution and 0.2pc for the other companies. For withholding tax on Distributors; the word turnover should replace the word imports and the word purchase should be replaced with the word imports. KCCI also suggested that a separate entity status be given to distributors and reduce the withholding tax to 0.5pc. KCCI viewed the recent imposition of rate of Tax for Individual, AOP and Distribution companies on flat 25pc as very harsh and said it would disturb a large number of SMEs. As the incidence of taxation would be very high specially for small scale AOPs, KCCI suggest that current rate of tax should not be changed. Advance tax imposed on import of edible oil @ 3pc whereas on other category of import item it is 5pc, the gap of 2pc does not allow a level playing field to all importers, the Chamber maintained. KCCI suggested the removal of this anomaly. Instead of reducing load shedding and power issues, the claim of arrears of power bills for the last 9 months as per tariff rate approved by NEPRA has no justification, it viewed. KCCI suggested for immediate withdrawal of this unjustified demand. In view of cash expenses above Rs 50,000, which according to recent budget is not allowable expenditure, KCCI suggested that clarification is sought whether cash purchases fall outside the ambit of Section 21 and the purchases should not be treated as expenditure in term of above section. A new provision is made whereby advance tax at the rate of 5pc shall be collected at the time of purchase on gross amount of domestic air-ticket. KCCI suggests that a person holding NTN certificate be exempted from tax. On Section 122 of Income Tax Ordinance, 2001, KCCI viewed it as highly unjust. Further, the Additional Commissioner is empowered to amend the order as many times as he likes, the Chamber observed. The retrospective application must be withdrawn forthwith while the amendment in assessment should be on some concrete basis not merely surmises and presumptions, it commented. KCCI suggested that the time limit of retention be reduced to 04 years as now everything is automated and record may be retrieved by the relevant department through their own computer record. Huge lists of penalties have been announced under the above sections. KCCI would like to understand under which provision unnecessary and wrong notices are issued for recovery of penalties and harassment is created and how such notices / tax penalties can be stopped which is also currently going on, it asserted. In recent budget, the standard rate of sales tax has been enhanced from 16pc to 17pc with effect from July 1, 2010. Additionally the varied rates of sales tax provided through certain SROs have also been enhanced. The rate of GST on various goods ranges from 7pc to 26pc which increase has badly impacted the cost of businesses and geared-up inflation. KCCI suggested a single rate of 15pc Whereas on Customs, despite Govt assurance, regulatory duty and excise duty on imports have not been withdrawn which cause a loss of Rs two hundred billion to the exchequer under ATT. KCCI suggests to withdraw regulatory and excise duties on imports, it said. Moreover, KCCI suggests the Government to take immediate measures on smuggling- prone items and withdraw regulatory duty as well as rationalise overall duties to restrict smuggling- prone items. Customs duty on crude palm oil has been reduced from Rs 9000 per metric ton to Rs 8000 pmt to bring down the cost of vegetable ghee and oil whereas the said benefit has not been extended for RBD palm olien and RBD palm oil. The benefit of the said reduction has only been passed on to 15pc users and majority cannot enjoy benefit of the said reduction and purpose of the government to reduce ghee and cooking oil prices would not be served. KCCI suggests extending the reduction of duty of Rs 1000/metric ton to RBD palm olien and RBD palm oil.