LCCI urges Govt to put off VAT in budget proposals
The Lahore Chamber of Commerce and Industry, in its budget proposals, has urged the government to avoid implementation of Value Added Tax (VAT) in the presence of smuggling, under invoicing and Afghan Transit Trade and in the absence of any invoice culture.
In the LCCI budget proposals that has been finalized after getting feedback from various sectors, the LCCI President Zafar Iqbal Chaudhry, Senior Vice President Ijaz A Mumtaz and Vice President Faisal Iqbal sheikh suggested that there should be only one rate of Sales Tax leviable on all kinds of products and services and rate of GST should be reduced to 12%. They said that the limit of exemption of Income Tax should be enhanced from Rs.100,000/- (which comes to Rs.8,333/- per month) to Rs.250,000/-. It was proposed that Capital Value Tax (CVT) on exchange, sale or purchase of industrial property shall be removed.
Pharmaceutical Industry has requested the government to change the Custom Tariff Rates of some raw material so that certain life-saving drugs could be made cheaper in Pakistan. For Technology promotion in manufacturing, proposals like provision of soft term loans and grants, R & D loans and grants at the rate of 10% and subsidy for inviting foreign delegates were made.
Textile sector asked that the omitted sub sections 2, 3 & 4 from section 148 of Income Tax Ordinance 2001 through Finance Act 2007 & 2008 be restored in the Finance Act 2010. Raw material of chemicals which are used primarily in textile sectors shall be Zero rated to avoid hassle of Sales tax refund for the manufacturers.
Following new items in the table of SRO 5098 (1)/2007 be inserted and other be re-numbered accordingly: 22 Preperation of Polyacrylic acid 2855.3900 95 Mixture of Phosphoric acid 3824.9099 96 Special Polythylenes 3901.2000 Industrial Chemicals industry pleaded that they need much more feed stock at rebated duties to manufacture “Stearic Acid” and other chemicals. They also proposed to maintain the existing custom duty on certain products.
Poultry Sector needs to be included in policy package for Corporate Agriculture Farming (CAF). Poultry is part of agriculture sector and is regulated by Ministry of Food, Agriculture and Livestock it is requested that poultry sector should be included in policy package for Corporate Agriculture Farming (CAF) approved by Federal Cabinet in its meeting held on 19-06-2002. Moreover, refund of Sales Tax Collected on electricity consumption, freight subsidy and rebate on export of poultry and poultry products shall be given.
It is also requested to protect Local poultry sector by Imposing 15% Regulatory Duty on import of poultry products. They requested to put a ban on import of raw chicken and chicken products. Tyres and Tubes Sector drew the attention towards the mass smuggling of goods especially under the flag of Afghan transit trade.
For Agricultural Tractors, relaxation in Governmental Taxes should be provided on the import of Tyres. The Biotechnology & Genetic Engineering sector urged that government should provide special attention for the development of Biotechnology & Genetic Engineering sector in the country as Pakistan is still far behind in this sector from neighboring countries like India and China. In this regard committee proposed that government should allocate special funds for this sector.