May 29, 2007	Tuesday	Jamadi-ul-Awwal 12, 1428

RAWALPINDI, May 28: The Rawalpindi Chamber of Commerce and Industry (RCCI) has proposed to the government to set up a national task force for software exports with the explicit goal of achieving $4 billion target by 2010.

In its wide-ranging proposals submitted to the government for consideration in the 2007-08 federal budget, the Rawalpindi Chamber suggested that the government should support the task force by ensuring that no change in the government could affect the work of the task force and that the telecommunication industry is privatised.

It suggested drafting of an enlightened and futuristic IT policy besides creating an IT fund of at least Rs1 billion for entrepreneurs.

It was also proposed that the government should provide financial assistance to prospective entrepreneurs to establish and operate computer training institutes in major cities of the country in order to promote the quantum and quality of computer education in the country.

The Chamber suggested exploring the emerging EU market of software to get the due share by planning the export of software products. Pakistan has the potential to emerge as one of the prominent software producing countries in South Asia.

With regard to the industrial revival, the Rawalpindi Chamber suggested that the government should reduce the rate of duty on all machinery and raw materials, except for those manufactured locally, to zero and to a maximum of 5 per cent in any case.

Special Industrial Zones should be revived to encourage new investments, while new projects in value-added sectors worth over one million dollars be given a five-year tax holiday.

The Chamber was of the view that the non-traditional sectors were needed to be focused if Pakistan is to diversify its export base beyond textiles and other agro-based products. It suggested that the government policies should concentrate on the exports of value-added items and discourage exports of raw material and semi- finished goods.

On stock exchange, the Chamber suggested the government to reduce the rate of capital value tax on each share transaction, and revise the withholding tax increased last year.

The Rawalpindi Chamber urged the government to take measures in the next budget for the revival of the poultry industry on war footing on the ground that the scare of bird flu had not only affected the local consumption but also the exports, which the Chamber says, has reached to almost zero level. Among the measures the Chamber suggested were exemption of income tax for five years, low mark-up of working capital loans, export revival, etc.

RCCI suggested to the government to allow the import of precious stones for processing and sale in order to develop the capability for their processing and re-export.

The Chamber, in its proposals, suggested that the government should increase duty on luxury items in order to decrease the burden on import bill. However, duties on necessary commodity items like edible oil and life saving drugs should be rationalised.

RCCI pointed out that the government was deducting income tax on amount inclusive of sales tax which comes under double taxation which is prohibited under the law. This practice should be discontinued and income tax be calculated on amount inclusive of sales tax.