A meeting of “Sub Committee on Taxation” of Islamabad Chamber of Commerce & Industry was held at Chamber House, Islamabad to finalize and submit the tax proposals to FBR for federal budget 2010-11. 

Chairing the meeting, Zahid Maqbool, President ICCI said that smuggling in the country from neighboring borders is causing sufficient loss to the genuine businessmen and government should consider reducing the duties and taxes on smuggled-prone items to promote legal import of such items. This measure will also improve the tax revenue of the government.

He said current rate of sale tax is very high for end consumers and tax rate should be brought down from 16 percent to 12.5 percent in the upcoming budget to give some relief to the inflation-hit people. He said corporate tax rate should be reduced from 35 percent to 25 percent, which will lure more investment and joint ventures in the country.

ICCI President said that almost 90% needs of medicines are catered by the national pharmaceuticals saving billions of dollars on import bill. He said government should reduce duty on the import pharmaceutical raw materials from 10% to 5% so that these companies could provide medicines to people at affordable price.

The Committee members said that conceptually the withholding tax regime is an indirect tax which is against the spirit of income tax. They proposed that the scope of withholding taxes and final tax regime should be reduced to give people some sense of comfort.

They said that NTN should be made compulsory for sale and purchase of property & other assets, which will help in broadening the tax base. However, they said that the existing tax filers should not be probed or harassed, otherwise, such measures will shy away the potential taxpayers from coming into the tax net.

Businessmen said that the recognition of taxpayers’ contribution and offering them specific social privileges like giving priority treatment at airports, in government hospitals and other public dealing places, can motivate others to come into the tax net. They said government should issue Tax Cards like Gold and Silver cards so that all eligible people could feel some incentive in becoming regular taxpayers.

Zahid Maqbool said that the database of SECP & FBR should be integrated to ensure that the corporate entities registered with SECP are regular taxpayer. This will also help in tracking the tax evaders, he said.