ISLAMABAD, May 30: The Federation of Pakistan Chambers of Commerce and Industries (FPCCI) has asked the government to implement a uniform tax law throughout the country with equitable and fair taxes between different classes of society. The demand has been made by FPCCI in its budget proposals for 2005-06. The apex body of businessmen and traders claimed that less than one per cent of the total population were taxpayer. Out of the total 21,500 companies, which have obtained National Tax Numbers (NTNs), only 13,000 have filed return of income. The situation could be improved only after the implementation of a uniform tax law across the board, it suggested.
It suggested to the government to reduce by 10 per cent the tax rate on corporate and non-corporate sectors and bring down to two per cent the rate of withholding tax on supplies and at import stage. The present statutory limit of exemption under the income tax law be increased from Rs100,000 to Rs200,000, while rate of withholding tax may be rationalized to provide level-playing field to the corporate taxpayers, the body has proposed.
The taxation laws including forms, statements and other necessary documents must be simplified to put an end to the needless inconvenience taxpayers are suffering at present, the FPCCI proposed. “The modern fiscal policy pursued by the most progressive countries like Hong Kong, Singapore, France etc., are aimed at making the revenue grow, not by increasing tax rates but by enlarging the tax base. This policy must be adopted by the country as well”, it observed.
The present five per cent customs duty on the plant, machinery and equipment not manufactured locally was discouraging the setting up of new industry in the country, therefore, the duty rate must be brought down to zero, the federation suggested.
It said certain machinery parts including spares were being charged at 35 per cent customs duty. According to the FPCCI, inordinate delay was being made by the department concerned to finalize the de-registration cases under Section 21 of the Sales Tax Act, 1990, resulting in the piling up of a large number of de-registration cases and mental torture for those claiming de-registration.
The body has suggested a two-month total time limit for the process of de-registration. It said under Section 21(2) of the Sales Tax Act, the registered person may be blacklisted or his registration suspended, pending further inquiry. The rules made under this section provide that the collector shall make every effort to confirm the facts. If satisfied, the collector shall issue a notice to the registered person.
However, the FPCCI has claimed that the rules of investigation were seldom followed by the collector in clear violation of the act. It has proposed that the input tax credit should not be denied to any taxpayer if he is able to prove the compliance of Section 7, 8 and 73 of the act.
“It is the department concerned which ought to be guided to enforce registration laws effectively and the taxpayers should not be penalized for procuring goods from a registered person.”
