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| April 15, 2006 | Saturday | Rabi-ul-Awwal 16, 1427 |
Under-invoicing, smuggling top chambers’ concern
LAHORE, April 14: Under-invoicing and smuggling are on top of the joint budget proposals forwarded by 15 chambers of commerce and industry to the federal government from the platform of the Punjab Economic Forum on Friday.
At a press conference held at the Lahore Chamber of Commerce and Industry, forum president Mian Anjuman Nisar and other office-bearers said economic issues pertaining to all parts of the province had been included in the budget proposals.
They said the government had been asked to formulate a strategy for sharing the data of exports with the countries of origin, specially China and Dubai, for controlling under-invoicing and smuggling. He said controlling of under-invoicing and misdeclaration required government attention because these were damaging the industrial base of the country.
They said the forum had urged the government to announce the budget only once a year. The practice of announcing mini-budgets in the form of fortnightly revision of POL prices should be given up. The government had also been asked to take steps to check inflation which had increased to 18 per cent according to unofficial figures. It had also stressed the need for a clear-cut policy on Safta and taking up the issue of water reservoirs and dams on Punjab rivers with India.
The forum had also proposed an amendment to law for allowing one dish at marriage parties for the protection of the poultry industry. It had also proposed a cut in sales tax from 15 per cent to seven to 10 per cent and its application in all parts of the country. A simplified system should be introduced for refund of 15 per cent sales tax paid on import of raw material for five sectors whose products had been exempted from it at the sales stage. Carry forward period should be increased to six to nine months, and the facility of zero-rated tax for products of five-zero rated sectors withdrawn from commercial importers to give manufacturers a comparative edge.
They said the presidents of six chambers had also expressed concern over the low capacity of e-filing of sales tax returns through NIFT. It was unable to sustain the workload generated on 13, 14 and 15 of every month.
Surgical and pharmaceutical products were exempted from sales tax, but surgical cotton, which was an important part of the industry, was subject to a 10 per cent tax and required to be exempted from it. Sales tax on packing material, electricity and gas bills of the industry also required to be waived.
They said the forum had proposed raising of income tax exemption limit from Rs100,000 to Rs250,000 with the highest tax slab not exceeding 20 per cent and reduction of tax on income of companies to 30 per cent instead of 35 per cent by the year 2007 besides introduction of a 25 per cent slab for the companies listed on stock exchange. An automatic system should be evolved for issue of adjustment advices for input output tax as these were not issued within 10 days as required. Age limit for senior citizens should be reduced to 58 and withholding tax on bank cheques exceeding Rs25,000 waived.
They said the government should adopt the Chinese strategy of ‘first generate the business activity and then impose tax on it’. China was providing free electricity to export-oriented industries and 28 per cent rebate on exports in addition. India, China and Bangladesh were giving a 20 to 25 per cent export rebate to their knitwear industry, but the same industry in Pakistan was collapsing owing to lack of incentives.
The industry should be saved by giving suitable incentives. A decline of 11 per cent and 33 per cent had been recorded in garment and bedlinen sectors, respectively, owing to a tough competition with India and China. Measures should be taken to restore production of both the sectors, they said.
The forum had also expressed concern at increase in the cost of doing business as a result of high bank markup rates. Duty on the import of raw material for pharmaceutical industry should be reduced from 10 to five per cent, electricity and gas subsidies extended to promote industries in Sheikhupura, and gas be provided for industries in Sahiwal and Gujrat on a priority basis, they said.
The forum had also stressed the need for exemption of all raw materials not manufactured locally from customs duty to enable the industry to compete in the international market. Machinery import should also be exempted from duty and no charges levied on the clearance of goods from bonded warehouses for the first three months. The charges after three months should be 0.25 per cent instead of one per cent in view of reduction in maximum rate of duty from 100-150 per cent to 25 per cent.
The forum had proposed a ban on the export of wet blue leather and encourage its export after value addition. Over 100 rice exporting units established in Sahiwal during the past three years should be provided assistance from the Export Development Fund for infrastructure development, while food and packaging industries should also be provided subsidies for the purpose. The Frontier Works Organisation should be stopped from recovering toll near Kot Abdul Malik as it was a burden on industries in Sheikhupura.
They said the forum had also stressed the need for effective measures to check the menace of fake products. It had also proposed development of an export processing zone in Sahiwal and assistance for old-fashioned pottery industry in Gujrat for the installation of new kilns for modernisation of the production process.
Referring to area-specific budget proposals, they said the forum had proposed a freight subsidy for furniture industry in Gujrat and identification of foreign markets for the export of its products. Natural gas should also be provided for wood seasoning plants on a priority basis, and funds allocated for common effluent treatment plants in Faisalabad.
They said the forum had also proposed raising of limit for workers welfare fund from Rs300,000 to Rs1 million. Corporate should be reduced from 37 per cent to 25 per cent for bringing it at par with China.
They said the budget proposals had been formulated by the forum executive committee comprising chamber presidents and 15 technocrats, including economists, agriculturists and consumers. Three vice-presidents of the forum were presidents of Faisalabad, Bahawalpur and Rawalpindi chambers representing the central, southern and northern Punjab.
Those who spoke at the press conference along with Mian Anjum included LCCI president Mian Shafqat Ali, vice-president Aftab Vohra, former president Misbahur Rahman, Bahawalpur chamber president Mahboob Nasir, Rawalpindi chamber president Jalil Ahmad, Sheikhupura chamber chief Mohammad Yousaf and Sargodha chamber president Abdul Sami Sehwani.
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