LAHORE, Jan 28 (APP):Federal Minister for Finance and Economic Affairs Asad Umer on Monday pledged to make clubbing of taxes in the next federal budget to facilitate the businessmen paying a large number of taxes.
The Finance Minister made this announcement on demand of the LCCI President Almas Hyder, during his visit to Lahore Chamber of Commerce & Industry. State Minister for Revenue Hammad Azhar, Punjab Minister for Industries Mian Aslam Iqbal and Federal Board of Revenue (FBR) Chairman Dr. Jahanzeb Khan also accompanied the Federal Finance Minister. LCCI Senior Vice President Khawaja Shahzad Nasir, former office-bearers and Executive Committee Members also spoke on the occasion.
Asad Umer said that business community would be given the facility of single tax collector in the coming federal budget. He said that trust building between government and business community was need of the hour as private sector would be leading economy in the 21st century while government would act as facilitator.
The Finance Minister said that FBR and private sector would have to give honour to each other for trust building. He said that promissory notes for industrial sector was the idea of private sector and it would help resolve the issue of liquidity. He said that federal cabinet would approve finance bill soon.
To a question, he said that interest rate was the matter of central bank, saying that savings were a must for sustainable economic development. Last year, saving were as low as 10.4 per cent, which should be 25 to 28 per cent to achieve the annual growth target of 7 percent. The State Bank of Pakistan would have to maintain a balance. Asad Umar said that industries were provincial subject after 18th Amendment. Federal and Provincial government would
take stakeholders on board to get their valuable feedback.
He said that Special Economic Zones were of utmost importance. “I believe that operations of these SEZs should be in the hands of private sector,” he opined. He said that Information Technology Sector was near to his heart and a task force has been formed and soon a package would be announced for IT sector. He said that
Privatization Commission had been asked to work with full throttle for loss making public sector enterprises. He said that 11-member board had been formed for ‘Sarmaya Pakistan’ that would have 8 representatives from private sector, while remaining would be from the government.
On this occasion, Minister of State for Revenue Hammad Azhar said that Standard Operating Procedures (SOPs) were being evolved for issuance of tax exemption certificates. He said that raids at business premises have been ceased and SOPs were being formed in this regard as well. He said that Tax Reforms Implementation Committee was active, while tax policy and tax administration were being separated.
Punjab Minister for Industries Mian Aslam Iqbal said that draft of industrial policy had been approved by the provincial cabinet. Work on Quaid-i-Azam Apparel Park on 1500 acres and Special Economic Zones was well on the way. Cabinet had also passed labour deletion policy while rules and regulations for land lease policy would be
forwarded to the cabinet for approval soon.
The FBR Chairman Dr Jahanzeb Khan said that FBR reforms were one of the top priorities of the government for trust building. He said that litigation was nothing else but waste of time and capital.
He said that Alternative Dispute Resolution (ADR) mechanism was being promoted to settle the issue out of court. He said that Lahore Chamber would be FBR’s partner in this regard. He said that Tax-to-GDP ratio would have to be made better.
Earlier, LCCI President Almas Hyder said that benefit of the payment of Refunds through promissory note should also be extended to all the other sectors in addition to five zero rated sectors.
He said that elimination of Regulatory Duties (RD) on all the raw material lines to reduce the cost of doing business and making manufacturing competitive. He said that government should take steps to reduce the interest rate. The recent hike in the SBP policy rate to 10 percent (highest in five years) had made borrowing highly expensive for private sector and discouraged investment that needed debt financing.
The government should rezone urban centres, demarcate industrial land and set up SEZs all over Pakistan. The exemption from the payment of Sales Tax on imported plant and machinery for Greenfield projects in the Mini-Budget should also be granted to the brownfield projects for balancing, modernization and replacement of existing units. For
the hand-holding of SME sector and enabling it to realize its true potential, the government should announce a five-year Tax Holiday for the new SMEs. He said that prior notice should be served before the visit of Tax Officials on the premises of business community.
Almas Hyder said that the total number of taxes should be reduced to six by clubbing labour related taxes e.g. EOBI, PESSI, WPPF, WWF Professional and Property Tax Federal and Provincial Sales Tax. The frequency of the tax payments of above proposed labor tax, Sales Tax and Corporate Income Tax should be once a year.
The services sector (Wholesale & retail trade, Transportation, Storage & Communication, Finance & Insurance and Housing) was the main driver of economic growth in Pakistan with a contribution of 60 percent in the GDP. To enable the services sector to realize its potential in terms of exports, it should be incentivized and included in the priority sectors in the “Trade Related Investment Policy Framework 2015-2023” for export oriented investments.