KCCI for innovative solutions in budget 2023-24 to deal with present economic situation
KARACHI:The Karachi Chamber of Commerce and Industry (KCCI) on Tuesday, stressed the box solutions in the upcoming federal budget 2023-24 to deal with the present economic situation.
The Karachi Chamber, in a statement issued here, urged the ministries of Finance, Commerce and the Federal Board of Revenue (FBR) to come up with an innovative approach coupled with a better perception of the ground realities of Pakistan's economic landscape and business dynamics to put the economy back on track.
KCCI pointed out that limited foreign exchange reserves with declining inflows, reduced imports of industrial raw materials and essential goods, effects of the high cost of energy, inputs and shortage of raw materials on exports, low productivity of the agricultural sector, high inflation and stagnation in real estate market were key economic issues requiring special attention.
To overcome the unavailability of foreign exchange and decline in inflows, KCCI proposed that importers may be allowed to arrange payment or remittance of foreign exchange through their own sources including outside of Pakistan and directly receive their import documents from suppliers without the involvement of domestic commercial banks in wake of the questionable role of commercial banks in last few months.
The policymakers should explore other avenues to enhance revenues such as withdrawal of exemptions from PATA, FATA and Azad Kashmir, reducing the government’s administrative expenditure and size of the cabinet and perks and retirement benefits of officers in grades 17 to 22 in addition to reducing the size of PSDP, KCCI demanded.
KCCI also underscored that all audit functions should be brought under one provision of the Income Tax Ordinance rather than various overlapping provisions with clear and well-defined parameters.
It further proposed transparency and openness in audit parameters and curtailment of powers of the Commissioner and sub-ordinate officials to restore the trust of taxpayers and encourage a broadening of the tax base.
KCCI also proposed that the CNIC number of unregistered buyers provided by a registered seller/supplier must be treated at par with STRN and a 3 percent further tax on supplies to the unregistered buyer should not be charged, if the CNIC number was provided by a registered seller in Sales Tax Return.
KCCI proposed that Sales Tax Invoices issued by Sellers for goods sold to buyers in various other parts of the country should be treated as a valid document for clearance of all such goods.
The chamber suggested revising WHT to 2 percent on the import of essential food items and it should be equal for all importers either commercial or industrial while Withholding Income Tax at the import stage on raw materials should be treated as Advance Tax and be adjustable against actual liability.
The chamber proposed to phase out the concept of minimum WHT on the import of raw materials, making a distinction between importers of finished goods and raw materials, rationalizing Customs Duty on reactive dyes to a maximum of 3 percent and abolishing Additional Customs Duty.
KCCI also proposed to reduce the rates of Customs Duty to 2 percent, Sales Tax to 12 percent
WHT to 1 percent for both industrial and commercial importers of Polymers.
The chamber recommended that the Value Addition Sales Tax of 3 percent on Commercial importers be waived as they do not add any value to raw material and sell it to small industries in the original form.