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Budget 2020-21: Traders, Industrialist seeks reduction in customs duty & other taxes

Budget 2020-21: Traders, Industrialist seeks reduction in customs duty & other taxes

LAHORE: The Pakistan Industrial and Traders Associations Front (PIAF) has called for a relief-focused budget 2020-21 for trade and industry as well as the general public, suggesting the government to make visible reduction in customs duty and taxes, helping revive the businesses, which are near to bankruptcies owing to worldwide lockdowns amidst coronavirus.

PIAF chairman Mian Nauman Kabir, in a joint meeting of various trade and industrial sectors held to review the Budget proposals for the upcoming fiscal year, appreciated PM Advisor on Finance and Revenue Dr. Hafeez Shaikh for his commitment of providing tax relief in the budget, urging him that the major focus should be on greater relief to especially documented and registered SMEs rather than new taxation measures.

The meeting was also co-chaired by PIAF senior vice chairman Nasir Hameed Khan and vice chairman Javed Siddiqi.

Mian Nauman Kabir said that PIAF, in consultation with the whole business community has finalized its budget proposals, also sent to the relevant departments, urging the authorities concerned to incorporate them in the Budget 2020-21, as their implementation would address the key issues of trade and industry.

The chairman said that PIAF has taken all trade and industry associations on board for preparation of proposals for the upcoming budget. He said that efforts were made to give government a set of suggestions for upcoming budget to make it business-friendly.

He said the business community understands that PM Advisor on Finance was utilizing his best abilities to overcome economic challenges but at the same time the private sector considers itself duty-bound to point out the government hitches for speedy economic recovery.

Mian Nauman Kabir proposed that amid Covid-19 scenario the government should defer interest payments of the businesses for at least six months, besides reducing power tariff for all trade and industrial sectors to 7.5 cents/kwh.

With a view to improve the access of finance to SMEs, the PIAF proposed that the government should introduce a scheme of interest-free loans for the documented and taxpaying SMEs.

Besides, the existing credit limits of the trade and all kind of industry which have taken loans from various banks should be enhanced.

PIAF senior vice chairman Nasir Hameed Khan recommended the government to defer electricity and gas bills of the whole businesses for a period of six months. He proposed the government that source of income should not be asked on any kind of investment in all sectors of the economy for the next two years in line with the exemption given to the construction sector.

Nasir Hameed observed that the impact of Covid-19 has badly affected business and industries, stressing the government to bring down sales tax to single digit while key policy interest rate to at least 5 percent in order to facilitate growth of business activities,

improving revenue, besides helping economic revival.

Keeping in view of the difficulties of business community the government would have to reduce the cost of doing business, encourage new investment, promote industrialization and create millions of new jobs to come out of pandemic crisis.

Nasir Hameed urged the authorities that the ratio of taxation and import duties should be brought down significantly, besides waiving of income tax and additional income taxes with an ultimate objective of extending support to the trade and industries to ensure their survival.

PIAF vice chairman Javed Siddiqi said that the export-oriented sectors subjected to 17%t sales tax should be reverted to the sales tax zero-rating regime with ‘no tax and no refunds system, besides ensure speedy payment of previous refunds to the exporters.

Moreover, the PIAF vice chairman recommended a reduction in sales tax from 17% to a single digit, besides suggesting reducing the WHT rate to 1%.

Javed Siddiqi said that low cost of inputs and compatible energy prices would help promote ease of doing business and make Pakistani products competitive in the international market where the country had to compete with many regional countries.

He proposed duty-free import of industrial machinery for modernization of local industry to help enhance capacity of this sector to compete in the world markets.