MULTAN, March 18: The Multan Chamber of Commerce and Industry has urged the government to declare tax holiday on the establishment of new engineering units in the country for five years.

Giving inputs for the trade policy for 2003-04, the chamber demanded a package of incentives for the promotion of engineering industry.

It also demanded export processing unit for the units, which would export 25 per cent of their production in the first three years of their functioning, and after the expiry of grace period, the facility be extended to the units which would be exporting 50 per cent of their production.

To encourage recycling industry, it suggested that the finished products which used industrial and city waste as raw material be exempted from income tax, sales tax and excise duty for eight years.

To facilitate exporters, it suggested a liberal tax relief for small-scale and new exporters and one-window-operation for sales tax and duty drawback refunds. Moreover, an export development bank be established, export credit facilities be given to non-tradition exports especially on pre-shipment and export credit guarantee scheme be reviewed to make it easy.

The gold/silver category scheme for the refund of sales tax and customs duty drawbacks be simplified to enable more exporters to get benefit of the scheme. The markup rate on exports be brought down to four per cent under the export refinance scheme, while under part-II of the scheme, the exporters were required to export goods two times more than that of their export finance limit, which should be reduced to one and a half.

The chamber stressed the need for rationalizing high power, gas and water tarrifs. For this, the monopoly of the public sector on power generation and distribution be done away with by encouraging the private sector. Likewise, all restrictions on import of raw material not available locally be removed.