The Rawalpindi Chamber of Commerce and Industry (RCCI) has submitted to the Federal Board of Revenue (FBR) a set of proposals for consideration and incorporation in the federal budget 2019-20, stating that these proposals would help increase economic activity, incentives for manufacturing and SMEs and widen the tax net thereby increasing the government revenue.
The RCCI President Malik Shahid Saleem said in a statement that the proposals had been categorized into income tax, sales tax and custom duties with special focus on the documentation of the economy. Key proposals in the category of income tax relate to broadening the tax base, it was suggested that discretionary powers of inland department should be restricted as it lead to abuse of authority and harassment.
Government should take additional measures to incentivize exports and taking other measures to ease the cost of doing business and improving the overall regulatory regime to facilitate exporters. Exemptions from any tax and audit for first 02 – 03 years. Active Tax Payers List (ATL) to be upgraded on weekly or monthly basis. National Tax Number (NTN) or Chamber membership should be made compulsory for starting new businesses or obtaining commercial electricity / gas meters.
Tax Filers be given privileges in hospitals, schools, airports, banks etc and Tax Filers be given power of attesting authority. Reduction in the rate of income tax has also been sought. Tax holidays may be introduced for new business ventures for at least first five years from the date of incorporation for those taxpayers who incorporate their businesses as LLP/ Companies.
In case of Small Companies, the rate of income tax may be reduced from current 25% to 20%.
Small Companies should be exempted from being withholding agent to deduct taxes and file statements. The RD imposed by the Ministry of Finance (Revenue Division), through its Notification SRO-1065(I)2018 dated 16th October 2018, may be removed with immediate effect however, percentage of sales tax may be reduced to 10% non adjustable, non-returnable. However, 17% sales tax on sales value may be abolished as it leads to miscalculations and malafied working.