20000314

Kati suggests

abolition of

wealth tax

RECORDER REPORT

KARACHI: The Korangi Association of Trade and Industry (Kati) has proposed that the government should do away with the existing 103 federal, provincial and local taxes and only three federal taxes i.e. customs duty, income tax and sales tax should remain in force.

In its budget proposals for the fiscal year 2000-2001, the association suggested that the wealth tax should also go so that the rich could declare their hidden assets and take full advantage of the amnesty scheme announced to whiten the money by paying 10 percent tax.

Other recommendations of the association are:

Ñ The government should speed up the privatisation process and the proceeds be exclusively used to retire both domestic and foreign debts.

Ñ One-window operation be introduced and there should be only two tax collecting agencies known as federal tax agency and provincial tax agency and they should be made responsible for collecting taxes.

Ñ The present Income Tax Department should be converted into income tax foundation (ITF) having its own rules, bye-laws and regulations.

Ñ The availability of export finance must be given top priority for smaller and medium scale export houses.

Ñ Exports be treated as zero rated as there is no logic in exporters paying General Sales Tax (GST) first and then filing refund claims which is not only a time consuming and painstaking drill but also creates liquidity problem for the exporters.

The association pointed out that a significant amount of foreign exchange could be earned through exports of vegetables, fruits, juices and other food items if the government regularised the export of these items.

If proper attention was paid to avoid wastage of fresh fruits and vegetables which was to the extent of 25 to 30 percent due to improper harvesting, transporting, packaging and storage, Pakistan could earn up to Rs 3 billion worth foreign exchange from exports.

The association further proposed development of fisheries resources on Balochistan coast and for the purpose, modern canning plants be set-up on the Balochistan coast-line at places such as Pasni and Gawadar.

The association proposed that industrial policy be framed for a period of 5 to 10 years and economic policy be given constitutional cover.

The association further suggested that over protective labour laws that did not encourage productivity and scared away investment must be done away with.

The association suggested that the government consider lowering of GST rates from 15 percent to five percent which would be paid easily by every retailers.