KARACHI: In its proposals for the upcoming budget, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has asked the government to bring down the standard sales tax rate to seven per cent which should be collected at a single stage of import or manufacturing.

The apex trade body in its proposals for Federal Budget 2018-19 suggested that the government should use the sales tax scheme for broadening of tax base.

However, the body maintained that the sales tax rate for high tax earning sectors for the government like POL, energy, telecom, tobacco and liquor should be kept high and no change should be made.

For value-added chain industry, the sales tax rate should be 0.5pc at each stage of value addition.

It believes since a lot of time would be required to bring sales tax rate to a single-digit, therefore, at first stage it should be reduced to 15pc. After making necessary amendments to the Sales Tax Act, 1990, the standard sales tax rate gradually should be reduced to 1pc annually.

In support of its arguments, the FPCCI stated that prevailing rate of sales tax at 17pc was too high particularly when a major chunk has to be refunded or adjusted and net tax in the government kitty only goes between 5-6pc.

Published in Dawn, March 16th, 2018