Finance Act: FPCCI for doing away with ‘harsh provisions’

Published: July 10, 2014
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The government should not withdraw the existing duty concessions for the plant and machinery not manufactured locally. PHOTO: FILE

The government should not withdraw the existing duty concessions for the plant and machinery not manufactured locally. PHOTO: FILE

KARACHI: The recent World Bank report ‘Paying Taxes 2014’ indicates that the workload of tax compliance in Pakistan requires 577 hours and this will further increase if the harsh provisions of Finance Act 2014 are implemented, says Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

“The business community is impatiently waiting to see removal of irritants and the harsh provisions of Finance Act 2014,” said FPCCI President Zakaria Usman in a statement on Wednesday.

He termed the new concept of “Alternative Corporate Tax” challenging, which would lead to complications between the taxpayers and collectors.

Welcoming the duty exemptions given on the import of textile machinery, Usman asked the government that the existing exemption from duties for the plant and machinery not manufactured locally should not be withdrawn.

He suggested that 5% tax on bonus shares should be removed because bonus was paid from retained earnings of a company, which had already been taxed. “If this tax stays in place, it will be tantamount to double taxation.”

He also underlined the need for imposing what he called justified duties and taxes on the import of auto parts. “It is surprising that auto parts are subject to duties and taxes on the basis of weight, which is unjustified, as vehicles are of different capacities and brands,” he said.

This policy should be revised and duties and taxes should be levied on the basis of units,  a suggestion which the Federal Board of Revenue chairman had promised to consider, Usman said.

Commenting on the gas infrastructure development cess, the FPCCI chief stressed that the government should reconsider the decision to increase the cess and keep it at the previous level. Any increase would only benefit Pakistan’s competitors and lead to a sharp decline in textile exports, jeopardising the benefits of GSP Plus scheme in European markets, he added.

Published in The Express Tribune, July 10th, 2014.

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