960403

Budget proposals

Plea to declare

Sukkur tax free

industrial estate

KARACHI: The Sukkur Chamber of Commerce and Industry has appealed to the government to declare the Sukkur Industrial Estate as free industrial zone and exempted from all local taxes on the pattern of Balochistan and NWFP with 50 percent concession in power tariff.

In its proposals and suggestions for the 1996-97 federal budget the Sukkur Chamber has pointed out that due to low literacy rate and dearth of competent accountants capable of maintaining books at retailers' level, the move to levying general sales tax at every stage of transaction- wholesale, retail or otherwise - would not achieve the desired results and would rather increase the rate of inflation and, thereby, social unrest.

It has been suggested that the Fixed Sales Tax (FST) scheme should be continued and the rate of sales tax should be fixed at 10 percent instead of 15 percent. The chamber has further made the following suggestions:

- As the new IT return forms are quite complicated, the old forms should be restored.

- Old self-assessment procedure be restored.

- Income exemption limit be raised to Rs 60,000 for business and Rs 70,000 for salaried class.

- Appeal fee be fixed at Rs 100.

- Turnover and withholding tax should not be leviable on industries located in holiday areas and rural areas and companies engaged in export and commission business.

- Tax base be broadened by levying tax on agriculture income.

- Trade organisations like Chambers of Commerce and Industry and associations should be exempted from income tax.

About wealth tax it has been suggested that the exemption limit should be raised to Rs 2.5 million and this limit should be exclusive of one house, one car, one shop and jewellery up to 4,000 gms of gold, as also inherited property not generating any income.

Investment limit for cottage industry is too low in view of the high prices of machinery and equipment and workers' wages. It has been suggested that this limit should be increased to Rs 2 million and the condition of Rs three lakh turnover be deleted.

To determine the protection level required for the local industry, before import tariffs on finished goods are lowered, an industrial cost commission should be set up. In the meantime

a) All primary raw materials (raw unprocessed not locally produced) be allowed import at Zero rate of duty.

b) Secondly raw materials, semi-finished raw materials, semi-finished goods, plant and machinery and components and parts not locally manufactured be allowed import at duties ranging from Zero to 20 percent.

c) Reduction of duties on finished goods should be made gradually over a period of five to seven years to enable local industries to adjust.

d) Total incidence of all duties and taxes on raw materials imported by the local industries, in all cases, should be lower than that imposed on comparable finished products.

e) The government should seek special exemption from World Trade Organisation (WTO) for industries of national importance which may have adverse effect by WTO levies.