ISLAMABAD, June 3: The government is considering proposals for duty free import and local purchase of capital goods and machinery from the next financial year.

Informed sources told Dawn that the proposals were sent by the business community to the Central Board of Revenue (CBR).

According to the proposals, there should be no tax on import and local purchase of capital goods, machinery, which was the major source of sustained economic growth and creation of employment opportunities.

The sources said that Sweden and other countries in the past had provided the same incentives that any income reinvested would not be counted as taxable income.

According to the sources, government should also grant such concessions to make the economy dynamic and to get rid of a decade-long economic stagnation.

It was observed, the sources said, that over three dozens different departments were chasing the taxpayers and harassment them and demand for illegal gratification.

To overcome this, it was proposed that the number of operational departments authorized to conduct visits or audits should be minimised. It should not be more than two departments, which might be authorized to work as agency on behalf of all other departments to conduct audits or pay a visit to the taxpayers.

According to another budgetary proposal, that taxes were large in number and aggregate incidence was much more than the paying capacity.

It was recommended that the number and rates of taxes be rationalised in a way that incidence of tax did not kill any particular industry or sector of the economy.

The tax system as a whole should be progressive in order to ensure horizontal and vertical equity with a view to alleviating the poverty, the sources added.