KARACHI, April 2: The Federation of Pakistan Chambers of Commerce and Industry has proposed withdrawal of exemption of capital gains tax and suggested levy of 10 per cent tax on a share that has been retained for less than six months.

“For the past many years, the stock market players are not paying taxes on their capital gains despite a big boom. It is high time that this sector now share the tax responsibility,” asserts a 28-page document of proposals prepared by more than a dozen business leaders of the FPCCI for the budget 2008-09.

It has also urged the government to impose tax on transactions of properties, plots, bungalows, apartments and plazas at the federal level for which the FPCCI wants reasonable rise in registered value. Pointing out that this tax has a potential to generate billions of rupees, the FPCCI has proposed to exempt from taxation a house on 120 square yards or a flat of 1,500 square feet.

The authors of the proposals observe that the package of fiscal suggestions is being offered at a time when life of a common man is under extreme pressure because of high inflation, especially the food inflation, rising unemployment, energy shortages and load-shedding, deindustrialisation and insufficient health and education facilities.

Prepared in this perspective, the package of 41 proposals include 35 suggestions to create a hospitable investment environment, 25 are relevant to inflation control, 22 advise on employment generation and 12 pertain to equitable distribution of income.

Likewise, 32 proposals aim at improving economic efficiency, 19 relate to buoyancy, 17 show revenue feasibility and 9 suggestions are to broaden the tax base.The business leaders want duty-free import of machinery for the industry, cut in sales tax to 10 per cent from 15 per cent on manufacturing and a tax holiday of five years to all those new industrial projects that will provide jobs to at least 50 persons. Withholding tax on imports of industrial raw material should be reduced to one per cent for commercial importers.

The withholding tax on export proceeds of textile products should be suspended for two years because of crisis situation facing the textile sector.

The minimum taxable income limit should be raised to Rs300,000 from existing Rs150,000.

The package has offered proposals for amending income and sales taxes, change in rate of import duties, slash in withholding duties to discourage smuggling, improving local manufacturing and generating employment.