April 20, 2007	Friday	Rabi-us-Sani 02, 1428

KARACHI, April 19: The Association of Chartered Certified Association (ACCA) has lauded government’s impressive economic performance in last four years when an average growth rate of 6.6 per cent a year was maintained. In tax reforms however, the ACCA said that government’s focus should not be only on achieving high volumes but on the basic principle “taxation according to the capacity to pay.”

In its proposals for next budget under the title “Striving towards a more equitable Pakistan,” the ACCA has suggested that the Central Board of Revenue should act as a facilitator and guide to the provincial governments in collection of agricultural income tax since it was a provincial subject in the constitution. It has proposed that owners of 100 hectares and more be taxed.

Sales tax rate should be reduced to 10 per cent and that refunds be paid within 30 days to all the registered persons. It wants a quick merger of the excise duty and sales tax into a value added tax. It suggests introduction of higher rate of withholding income tax on import of luxury goods and also some sort of levy on import of environmentally unfriendly goods.

The ACCA has taken note of the prime minister’s decision to extend grant of tax exemption for one more year on capital gain tax to stock investors and has called it a distortion. It wants tax on all capital gains whether it is on shares trading, real estate.

Tax on capital gains in stock exchanges, it said, will improve tax collection and also help in curbing speculation.