Karachi, June 12, 2019 (PPI-OT): An emergent meeting of the FPCCI Executive Committee, General Body members and trade body’s members was held under the Chairmanship of its Acting President Noor Ahmed Khan at FPCCI Head Office Karachi (Chair), Capital Office Islamabad and Regional Office Lahore via Video Link and considered the fiscal measures as proposed by the Finance Bill, 2019.
The participants showed mixed reactions, hailing business friendly measures as well as identifying harsh and irritant measures for their redressal in the statute for improving its impact on trade and industry. They lamented for abolishment on Sales Tax Zero-Rated Regime for five export-oriented sectors – textiles; leather; carpets; sports goods and surgical goods – and imposing 17% sales tax on items covered under SRO 1125(I)/2011 thus subjected them to refund regime and urged to restore the zero-rated scheme to eliminate corruption as well as improve the cash flow of exporters of these sectors.
They recalled that zero-rated scheme successfully lasted for more than a decade during which these export oriented industrial sectors, particularly textile sector which is the backbone of Pakistan economy has flourished. They concluded “The government steps to abolish the scheme, rather fine-tune the settled decade old zero-rating regime, removing anomalies, loopholes and ensure effective mode to improve sales tax collection on the local segment is quite surprising”. They hoped that the automated refund system would work efficiently. They also proposed that 70% of the sales tax amount be immediately refunded on realization of export proceeds / remittances without audit and the balance after post export Audit.
To promote investment and creating employment opportunities in the country they also proposed to restore tax credit @ 10% of the purchase value of machinery. They were of the opinion that the 17% FED on edible oil and increase in ST from 8% to 17% would render them out of reach of a common man. Similarly increase in rate of FED on Cement from Rs. 1.5 per KG to Rs. 2.0 per KG would increase cost of construction. They also recommended that Final Tax Regime be maintained and commercial importers, commercial suppliers of goods etc., be not brought under the Minimum Tax Regime.
It was also recommended that Technical Team be formed to identify the hardships and harsh and irritant measures of the Finance Bill 2019 and formulate concrete recommendations for taking them effectively with the concerned quarters well in time. They said that the target of collection of additional tax of about 700 billion in the Budget 2019-20 would be an uphill task and apprehended that in case target is not met, there would be a mini budget to off-set the revenue loss.
They suggested that the proposed increase in Minimum Tax be done away with and be maintained at current rates, that increase in holding period to avail gain tax would render the construction industry at halt due to which its 70 downstream industries would also be affected thus reducing job opportunities.
Increase in ST rate on retail sector to 17% be withdrawn; Charter of Economy for preparation of long-term economic policy be formed; tax @ 10% on advertisement be withdrawn; Export Processing Zone (EPZ) and Special Economic Zones be activated; Tax on food industry be withdrawn to safeguard foreign food franchise from collapse; Two years tax rebate for women entrepreneurs be allowed; utilization of funds allocated for South Punjab Project be ensured; returns filed by assesses under presumptive tax regime on self-assessment basis be accepted and be not subject to audit for two years.
They also hailed the arm forces to slash the defense budget voluntarily in line with broader austerity measures being introduced by the government; reduction in customs duty on raw material, initiating agriculture insurance scheme, increased in minimum wages, etc.
S.M. Muneer, leader of the business community, Former Chief Executive TDAP and Former President, FPCCI, Syed Mazhar Ali Nasir, Advisor to the President and Immediate Past SVP of FPCCI; Muhammad Arshad Jamal, Muslim Mohammedi, Shireen Arshad Khan, Abdul Rauf Mukhtar, Muhammad Ijaz Abbasi, Abdul Waheed Shaikh, Vice Presidents of FPCCI; Shaikh Khalid Tawab, Former SVP of FPCCI; Bashir Jan Mohammad; Arif Habib; Abdul Qadir Memon; Ashfaq Tola; Abdul Rahim Janoo, Former SVP of FPCCI; Abdul Hafeez Muhammad; Hameed Akhtar Chadda; Shaikh Shakil Ahmed Dhingra; also attended the meeting.
For more information, contact:
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
Federation House, Main Clifton, Karachi, Pakistan
Category: General Business News