April 28, 2006	Friday	Rabi-ul-Awwal 29, 1427

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RAWALPINDI, April 27: The Rawalpindi Chamber of Commerce and Industry (RCCI) has submitted to the Central Board of Revenue (CBR) a set of proposals for consideration and incorporation in the federal budget for 2006-07, stating that these proposals would help increase economic activity and widen the tax net thereby increasing the government revenue.

The RCCI President Jalil Ahmed Malik told Dawn the proposals had been categorised into income tax, sales tax and import and export.

Key proposals in the category of income tax relate to increasing basic exemption of income tax from Rs100,000 per annum to Rs150,000. Reduction in the rate of income tax has also been sought.

The RCCI proposed the government should make a comprehensive policy regarding taxation of real estate business which had been completely ignored due to which property prices were shooting up exorbitantly. The government should levy withholding tax and capital value tax on all transactions for sale and purchase of property, it suggested.

Submitting a strong proposal to avoid double taxation, the chamber said the government was presently deducting income tax on amount inclusive of sales tax which came under double taxation. This practice should be discontinued and income tax be calculated on amount exclusive of sales tax. The government is also charging income tax from utility bills inclusive of sales tax which is also considered as double taxation.

It suggested that income tax should be calculated exclusive of sales tax amount.

It urged the government to introduce amnesty schemes in the next budget to bring capital in circulation.

Tax limit on retailers and small manufacturers having annual turnover of less than Rs5 million be increased to Rs20 million.

On the import of used auto-parts, the RCCI proposed that such an activity may be allowed as it was an integral component of the auto industry. Though import of used auto-parts is banned, these are abundantly available in markets through smuggling, causing huge revenue loss to the government. To curb smuggling, the chamber also proposed that custom duty on auto-parts be reduced to the minimum level.

It said with the removal of textile quotas, competition in the local and international markets had been increased manifold. To minimise the cost of production, the government should lower taxes and decrease utility tariffs drastically to avoid loss in competitive global markets.

It also proposed reduction in the import duty of CNG machinery.

It was stated that duty on spare parts should be revised downward to five per cent.

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