RAWALPINDI: Rawalpindi Chamber of Commerce and Industry (RCCI) ex-President Asad Mushadi has said that FBR have to implement their relief orders issued due to Covid 19 situation for shipping companies.
Talking with Customs Today during an exclusive talk he said that the Government and FBR have to implement their relief orders issued due Covid 19 situation, he added that banks, shipping companies etc should monitor weather they are giving relief as per Government directions.
He said that businesses are suffering a lot many will be forced to close down if not properly looked after. Unemployment and poverty will increase and will be difficult for the Government alone to handle the situation, one more point can be added like that any investment made in manufacturing sector should not be asked source of income so that local manufacturing industry can be developed.
Answering to a query he said that extraordinary situation requires extra ordinary steps, due to COVID-19 all businesses are closed not only in Pakistan but around the globe, and it will take a very long time for businesses to get ready and normalization maybe a little too far.
To create demands we have to make the prices attractive by reducing Sales Tax, other taxes and input cost, by doing so the economic activities can take place and government revenue which is at complete halt would start improving.
Sales tax rate to be brought down to 5 percent income tax to be brought down electricity rates to be brought down as a result of drastic reduction in POL prices.
Providing details of budget proposal 2020-21 the RCCI (Rawalpindi Chamber of Commerce Industry) former president said that in this financial year’s budget our main focus is on tax reforms although the last budget was a good effort in dealing with the issues faced by the business community, however some of the issues still need to be addressed these are divided as income tax, sales tax, and general sales tax (GST).
Following issues and their suggestions are put forward on tax affairs, the import customs duty on many items is very high which is promoting other sources of import like smuggling through the Afghan transit trade route, to discourage the smuggling, the import duty on certain items should be reduced so that smuggling through afghan transit trade is discouraged.
GST (general sales tax) to be brought down to 05% (currently 17%) MRP is asked to form importers to pay after the goods are sold which is not possible to calculate the retail profit of an importer, the previous system of import tax should prevail.
He said that RD (Regulatory Duties) on those items which are not manufactured in Pakistan is needed to be eliminated or decreased to the lowest possible rate.
The automobile industry and Vendor industry contribute to the major portion in the tax collection and due to current circumstances these sectors are in loss; these sectors should be focused and needed to be revived as they indirectly affect other sectors.
All heads of income should be taxed without working on the source of income including Agriculture also.
Number of Taxpayers needed to be increased rather than focusing on the increase of tax net, he added that Turnover tax to be decreased. Like: Turnover tax exceeding 100 Million Rupees to be implemented with a rate of 0.4% and so on.
Ease of Doing Business should be focused on giving competitive prices in energy and manufacturing/industry promotion policies should be opted.
Relaxations and incentives to be provided to a cottage industry, as they also contribute towards the economy of the country, interest rates are needed to be decreased and brought down to single-digit to promote a business environment.
FED (federal excise duty) should be abolished and regulatory duty should be revised thoroughly, revenue should not focus on the psyche of harassment and a business-friendly environment should be developed.
Relaxation in import duties and policies should be given so that export can be attained cash transaction used to have limits years back as PKR: 50,000/- which is now very less. It should be revised and aggregated more than 200,000.
WHT (withholding tax) should be made on ground realities and it should be systematized while Currency Value should be revised as USD should be $145 and not $150.
After the corona virus, Chinese imports are down so we should study and manufacture these products in Pakistan, he added that Stamp duty charges are too high Federal tax and provincial tax should be only 1% each.
Some projects are on paper and not being implemented but they are also being taxed, these are needed to be rechecked.
DC rate and FBR rate are different and they should be same CNIC should not be taken as it is leading to a shortfall in revenue generation, Corona virus is adversely affecting the economy; Stock Market has crashed and there is dire need to revive SME/Cottage industries in the country, otherwise, GSP plus is useless.
Because Ruling businesses are effecting badly as there is no alternate of Manufacturing in Pakistan; the government has imposed heavy cuts on imports by increasing duties and that is adversely affecting the imports, only those products should be cut that are already being manufactured here.
Local traders should be given due respect and consideration while devising the policies, regarding income tax, every one of the communities should be registered. And income tax should be fixed.
There should be a fixed tax on the plastic and recycling industry, he said that HVACR industry is contributing towards 40% in the economy and the main parts are imported from the world and currency devaluation has hit it harshly. Moreover, MRP (Market Retail Price) is not possible because the whole seller, agent, retailer, etc. are involved in assembling, selling the HVAC parts.
Section 165 (A) should be abolished, Section 139, should be abolished as it requires the AOP‟s members to take payment from other members if they don‟t have money in their accounts.
Section 138 should be lenient Section 182 & 205 regarding the return filing have high penalties which sum to about PKR: 140,000/-
The Sales Taxpayer is automatically Withholding Agent, there is a threshold of 100 million which should be revised, he added that In the 2nd amendment, a threshold of 50 million should be restored and benefits should be given to all.
Start-up businesses should be given immunity of 3 years from taxes so that they can flourish, PST is 16% on services and sales taxes should be lowered. Moreover, withholding tax of 12% is an issue.
Pharmaceuticals give 4%-5% commission and 12% on taxes – services on sales issues.