Daily Times

The Islamabad Chamber of Commerce and Industry (ICCI) has urged the government to reduce general sales tax (GST), highest slab of tax on rental income, and turnover tax on manufacturing sectors in the upcoming budget for the fiscal year 2021-22 to help stimulate the ailing economy.

In a statement on Thursday, the ICCI in its budget proposals said that the highest slab of tax on rental income was up to 35 percent, which is putting extra burden on the taxpayers and urged that the government should reduce it to 10 percent. It said that it would help promote tax culture, avoid tax evasion, reduce shop and office rents, and improve tax revenue of the country.

The ICCI said that the turnover tax on all manufacturing sectors should be reduced across the board in the next budget from 1.5 percent to 0.5 percent. It said that the high GST has increased inflation and production cost in Pakistan, therefore, it should be reduced to at least 5 percent without input tax adjustment to help stimulate the ailing economy.

The ICCI proposed that additional sales tax of 3 percent on industrial raw material should also be abolished to facilitate the revival of industrialisation. It said that to enhance the tax base, the government should introduce a 2 percent fixed tax for traders and shun the practice of attaching bank accounts of the business community as it creates distrust and shatters the confidence of taxpayers.

The ICCI said that the taxes and duties on the import of plant, machinery and all products related to various industries including construction, real estate, tourism, medical, agriculture should be removed to facilitate up-gradation of the industrial sector and production of value-added products that would boost exports.

The ICCI suggested the government that the import duties on luxury goods and vehicles should also be reduced significantly. The GIDC from gas bills of industrial and captive connections should be waived off to ease difficulties of industries and commercial entities.

The ICCI also proposed that electricity costs should be reduced by Rs5 per unit to encourage revival of all industries and make them more competitive for exports. It said that the policy interest rate should be cut down to 5 percent in order to encourage new investment and expansion of existing businesses.

The ICCI hoped that the government would include its budget proposals in the final budget for revival of business and economic activities.