PESHAWAR (APP): Sarhad Chamber of Commerce and Industry (SCCI) has suggested for utilization of dollar three billion non-military aid of United States in NWFP for reviving the trade and industry and to upgrade the dilapidated infrastructure of the province which is passing through a very critical juncture due to on going war on terror and highly alarming law and order situation. The suggestion was made in 'Budget Proposals as recommended by the SCCI for the upcoming federal budget for the fiscal year 2009-10. This US fund should be utilized to bailout the NWFP industry and to pace up industrialization in the province, said, President of SCCI, Sharafat Ali Mubarik while addressing a press conference here on Wednesday. SCCI president said the on-going war on terror and military actions in the tribal areas including provincially administrated areas has dampened the growth of Trade and Industry in the country particularly in the NWFP. The Foreign Direct Investment is showing downward tendency while the local investors in the NWFP have been shifting to safer places due to highly alarming law and order situation and recurring threats of lives and property. In view of the peculiar conditions obtaining in the NWFP, the business community vehemently suggests that the non-military aid of the US government needs to be expanded in this Province to revive the trade and industry and to upgrade the existing dilapidated infrastructure of N.W.F.P. Referring to budget proposals, SCCI president said we suggest the following incentives to revive the trade and industry of the NWFP 25 % relief in electricity / suigas bills for a minimum period of two years, the rate of KIBOR should not be more than 5% if not zero percent on mark-up for a period of two years, all the loans should be monetized along with mark-up for a period of minimum one year, DTRE facility may be allowed for export of all items to Afghanistan, 25 % relief in electricity / suigas bills for a minimum period of three years. For setting up of new industries, the SCCI suggested that the Import duty along with all allied taxes should be zero rated on import of machinery. Similarly, Tax holiday for a period of eight years be provided. To upgrade infrastructure and industrial estates, SCCI demanded of the federal government to earmark funds from the Export Development Funds for up-gradation of infrastructure of the province. In order to boost the exports to Afghanistan and minimize the Refund and Duty Drawback claims the no duty no refund based scheme has to be encouraged. For this purpose the unnecessary regulation has to be removed from these schemes. Pakistan is faced with a most serious energy shortfall. The acute shortage of electricity has resulted in load shedding costing the economy millions of rupees. The SCCI suggests the Federal Government to clearly design a policy for building Small Hydel Power stations which are very viable as they do not require building of large dams. In order to meeting the growing demand of electricity the Ministry of Water and Power should devise a strategy on war footing basis to import electricity from Central Asian Region via Afghanistan. The government should play its vital role and announce a clear cut energy policy which can attract investors to produce electricity and sell to the consumers commercially without any policy hindrances. The business community of the province is facing liquidity problem. The banks are reluctant to provide credit for the working capital. The banking companies should be directed to extend loans for the working capital to the industrialists and traders of NWFP so that they could have adequate liquidity to run their businesses. The banks charge 0.3% on cheques on Running Finance Accounts of more than Rs. 25,000/- from small traders. The borrowers are already paying mark-up on their R/F account @ 18% in addition to Annual Insurance Charges, Audit Charges, Annual Balance Sheet Charges and three years property valuation charges. It is therefore suggested that charging of 0.3% on the cheques issued in Running Finance Accounts for more than Rs. 25,000/- may kindly be waived off. To sustain industrial growth in NWFP and to attract foreign investment, which, in turn will give impetus to sustainable economic growth of the country, we suggest a reduction in the flat 35 percent corporate tax rates to 20 percent. It is long standing demand of the traders that the Income Tax Return Form be simplified to reduce it to one or two pages only as was done in year 1988-89, so that a common shopkeeper should be able to fill it by himself. In order to make our manufacturing sector competitive, we suggest that all raw materials imported for industrial consumption should be zero rated and rate of sales tax be lowered. This will help reduce the cost of production and expand industrial output. The levy of Sales Tax on utility bills should be charged at zero percent on manufacturing units. Certain units in this country are protected from local competition through imposition of regulatory duty. Despite lapse of the stipulated period, further extension has been given to them. For providing level playing field to the countrys businessmen, we request that this unlawful extension be withdrawn at once. In order to boost the exports of the country the rate under section 154-3A should be brought down to flat rate of 0.50 per cent of export realization. The current rate is too high. The main challenge faced by export sector is the unavailability of technically skilled human resources. We recommend tax benefits on the cost of staff technical training to carpets, jewellery and handicraft sectors. We propose that tax holiday for the establishment of new local technical institutes. In order to curb smuggling of goods and to earn foreign currency the export of goods to Afghanistan should be carried in Foreign Currency and not Pak Rupees. Keeping in view the problems being faced by the Exporters of the country, we would suggest an Export Finance Bank to be established. This will facilitate the exporters in obtaining loans directly without usual obsta cles and delays. A few proposals and necessary amendments in the Sales Tax Act 1990 are being recommended to be included in the next finance bill after accumulating feed back from our members both from Commerce and Industry and intensive discussion with all sectors of business community. The centralization of powers in FBR is also a great source of inconvenience to the tax payers. The FBR may devise guiding principles for the tax Collectors in the fields and they may be given powers to decide the matters at their end. The furniture industry in NWFP is a billion dollar industry which is confronting with numerous hurdles. The NWFP furniture Industry is small or more accurately a cottage industry, which has the potential to grow into a heavy industry because of inexpensive and talented human resource. However, the prerequisite for this development requires due attention from the Government. The export of carpets reduced drastically which is reflected on the carpet export figures. This state of affairs is not only affected the exporters community but also the Government Exchequer. The Rebate incentive was playing a significant role in sustaining the growth of Carpet Sector in recent past. We suggest that the Government should provide at least 5% rebate to make our products competitive. The Withholding tax should be reduced to .25% to provide added benefit to our exporters. This change will bring confidence in the carpet exporters and the country will earn valuable foreign exchange. Taxation on Cement is the highest in the region which is 30% while it is only 18% in India. Another factor affecting Cement sector is fuel prices which are sky rocketing. Under the circumstances immediate action is required. We suggest that the excise duty on cement should be slashed to half to bring the taxes on cement at least to the level of India. Gems & Jewelry Sector can bring foreign exchange to the country, if long term planning is carried out. Duty free import of gem cutting, polishing and carving machinery should be allowed so that the process of value addition of local gems is boosted. All lapidaries be treated at par with units, anywhere in Pakistan. Also the gemstones which are not available in Pakistan should be allowed to enter the country under entrustment scheme as advance.