Tuesday , June 2 2020
Breaking News
Home / Islamabad / Finance Minsiter Asad Umar directs Hammad Azhar to ensure early payment of refunds up to Rs5m
Finance Minsiter Asad Umar directs Hammad Azhar to ensure early payment of refunds up to Rs5m

Finance Minsiter Asad Umar directs Hammad Azhar to ensure early payment of refunds up to Rs5m

ISLAMABAD: On the demand of business community, Finance Minister Asad Umar has asked Minister of State for Revenue Hammad Azhar to ensure early payment of refunds up to Rs5 million.

According to ministry of finance, business community has presented a set of joint proposals regarding Federal Budget 2019-20 to Finance Minister Asad Umar. The business community had chalked out the proposals, which ranged from tariff rationalization, refunds, financing to industry, industrial expansion, free trade agreements, ease of doing business and taxation system, after holding various brainstorming and consultative sessions of all the chambers of commerce in the country.  Private sector of the country wants to supplement the government’s efforts aimed at economic revival of the country.

According to joint proposals presented to the finance minister, the chambers proposed that customs duties on all raw materials should be very low or zero. The government must eliminate regulatory duties and additional customs duty on raw materials so that the local industry could compete with the smuggled items and mitigate the effect of tariff free trade agreements.

It was also proposed that the rate of duties for trade and industry must be the same so that small and medium enterprises get a level playing field. The customs duties on intermediary products should be reduced so that the local industry could import quality materials, components and machinery from around the world. The chambers have informed finance minister that non-payment of refunds was drying out liquidity from the market.

They proposed that payments through promissory notes should be extended to all sectors including five zero-rated sectors. Refunds should be issued automatically without application, or pre-audit, within 60 days as per rules. The business chambers urged the government to reduce the mark-up rate as it has made borrowing expensive. The benefits of tax holiday should not only be for new projects but also for expansions. Chambers also proposed that the provincial governments should re-zone areas in and around urban centers, both for industrial and commercial use, to help entrepreneurs invest in green field and other projects.

Foreign investment should only be allowed as a joint venture or as a public-listed company so that local investors could also benefit. The proposals suggested that a company office should be formed for the registration of new companies, adding that registration of a company should be separated from regulation of a company. Chambers also proposed that there should be one tax collection authority for both federal and provincial taxes and audits should be risk-based with one month prior notice rather than random audits.

There should be a three-year tax holiday for the newly registered companies, especially for SMEs. They also suggested that exemption from sales tax on imported plant and machinery for green field projects should also be granted to brown field projects. No tax exemption should be given on imports if the equipment, machine or part is locally available. Fixed tax system should be introduced at the SME level to enhance the tax base. The Business community proposed that there should be an exemption from audit for taxpayers who deposit 20pc or more tax over the last year.

The tax exemption certificates to commercial importers and manufacturers should be issued automatically if their withheld tax is equal to last year’s tax. The source told that federal finance agreed with the proposals and these would be made part of the Federal Budget 2019-2020.