LCCI presents proposals for economic growth to Senate body

LAHORE:Lahore Chamber of Commerce and Industry (LCCI) President Kashif Anwar has presented a number of proposals to Senate Standing Committee on Finance and Revenue and advocated for legislation that would help the economy and encourage business growth.

The LCCI spokesman told media here on Tuesday that Kashif Anwar highlighted the improving position of foreign reserves and recommended measures such as local currency trade and barter trade mechanisms to mitigate the ongoing foreign exchange crisis.

To reduce the cost of doing business, Anwar emphasized the need to align Pakistan's interest rates with regional economies. He also urged the government to lower the refinance rate, introduce soft policies for small and medium-sized enterprises (SMEs), and provide special financing schemes with low markup rates.

The LCCI President emphasized on the importance of reducing the cost of doing business, particularly energy costs and land expenses, to promote industrialization and private sector growth in line with regional economies.

In order to enhance tax compliance and documentation, he proposed the introduction of a declaration scheme. This scheme would encourage individuals to bring undeclared foreign reserves, local assets, and wealth into the economic system, injecting liquidity into the economy.

President LCCI stressed the importance of raising awareness among non-filers about the benefits of entering the tax net.

He suggested expanding the tax base by bringing individuals with industrial or commercial electricity or gas connections into the tax net. He recommended charging a 25 percent income tax on the bills (electricity/gas) of non-filers and emphasized the need for a National Tax Number (NTN) for new commercial electricity/gas connections.

The LCCI President also called for the reduction of fines, penalties, and surcharges imposed on taxpayers. He suggested rationalizing penalties based on revenue loss and adjusting determined advance tax against pending refunds. He emphasized the importance of establishing a committee to clear the refund backlog promptly.

Kashif Anwar highlighted the need to expedite the resolution of tax revenue claims and proposed active engagement with the Alternative Dispute Resolution Committee (ADRC). He suggested granting chambers of commerce representation in the ADRC and ensuring that its decisions are binding and not challengeable by tax forums.

Regarding tax exemptions, Anwar recommended against extending the sales tax and income tax exemptions granted to industries in the erstwhile FATA/PATA region beyond June 30, 2023. He called for simplifying the sales tax system and reducing the high sales tax rate on inputs for export-oriented industries.

Kashif Anwar suggested removing area specifications for Tier-1 retailers and exempting one-shop retailers from point-of-sale (POS) integration. He proposed using electricity consumption units as a parameter instead of the cost of electricity and reducing the import sales tax on capital goods, plant, and equipment to zero percent.

The LCCI President highlighted the high corporate tax rate in Pakistan and suggested gradually reducing it to 15 percent. He called for minimizing withholding taxes for active taxpayers.

President LCCI concluded by recommending automation of the process of income tax refunds under section 170 for faster processing and to address liquidity issues.