LCCI presents budget proposals to finance minister for economic revival

The President of the Lahore Chamber of Commerce and Industry (LCCI), Kashif Anwar, presented a comprehensive set of Budget Proposals to the Federal Finance Minister Ishaq Dar, during a meeting held on Tuesday. The event witnessed the presence of several key officials, including LCCI Senior Vice President Zafar Mahmood Chaudhry, Vice President Adnan Khalid Butt, and various Executive Committee Members.

According to the spokesperson of LCCI, during the meeting, Finance Minister Ishaq Dar expressed the government’s unwavering commitment to restore the country’s economy to its former glory. 

Dar lauded the pivotal role played by the LCCI, citing his own past presidency of the chamber, and commended its efforts in promoting the country’s economic well-being. He further confirmed that the LCCI’s Budget proposals would be incorporated into the official budget document.

Dar also reassured the business community that the upcoming Federal Budget would prioritize the interests of businesses, focusing on creating a business-friendly environment. He urged all stakeholders to refrain from engaging in a blame game and instead directed their efforts towards steering the country forward. He also provided an update on the International Monetary Fund (IMF) program, assuring that while the process was taking time, all necessary formalities for the 9th review program had been completed.

President LCCI Kashif Anwar, recognizing the improvement in foreign reserves, put forth a series of measures to mitigate the current foreign exchange crisis. He suggested promoting trade in local currency wherever possible and adopting a barter trade mechanism. 

Anwar further emphasized the necessity of widening the tax base and enhancing documentation by introducing a declaration scheme. This scheme would incentivize individuals to bring undeclared foreign reserves, local assets, and wealth into the economic system, thus injecting liquidity into the economy.

Reducing the cost of doing business was another key point addressed by Anwar. He advocated for aligning Pakistan’s interest rates with those of regional economies and urged the government to lower the refinance rate. In addition, he called for the implementation of soft policies for small and medium-sized enterprises (SMEs), along with special financing schemes featuring low markup rates and no collateral requirements. 

Anwar also emphasized the need to tackle energy costs and land expenses to promote industrialization and stimulate private sector growth, in line with neighboring economies.

To enhance tax compliance and documentation, President LCCI proposed the introduction of a declaration scheme to encourage individuals to disclose their undeclared assets and join the tax net. 

Anwar recommended bringing individuals with industrial or commercial electricity or gas connections into the tax net, suggesting a 25% income tax on bills for non-filers. He stressed the importance of obtaining a National Tax Number (NTN) for new commercial electricity and gas connections.

Anwar further advocated for the reduction of fines, penalties, and surcharges imposed on taxpayers. He proposed a rationalization of penalties based on revenue loss and the adjustment of determined advance tax against pending refunds. Recognizing the importance of addressing the refund backlog, he recommended the establishment of a committee to expedite the clearance of pending refunds.

The LCCI President also highlighted the need for expediting the resolution of tax revenue claims, suggesting active engagement with the Alternative Dispute Resolution Committee (ADRC). He proposed granting chambers of commerce representation in the ADRC and ensuring that its decisions are binding and not subject to challenge in tax forums.

Regarding tax exemptions, Anwar recommended against extending the sales tax and income tax exemptions granted to industries in the erstwhile FATA/PATA region beyond June 30, 2023. He urged simplification of the sales tax system and the reduction of the high sales tax rate on inputs for export-oriented industries.

Anwar further suggested removing area specifications for Tier-1 retailers and exempting one-shop retailers from point-of-sale (POS) integration. He proposed using electricity consumption units as a parameter instead of the cost of electricity and lowering the import sales tax on capital goods, plant, and equipment to zero percent.

The LCCI President recommended a gradual reduction in the corporate tax rate to 15%. He also emphasized the importance of minimizing withholding taxes for active taxpayers.

President LCCI concluded the meeting by stressing the urgency of automating the process of income tax refunds under section 170. Such automation would enable faster processing and help alleviate liquidity issues faced by businesses and individuals alike.