LAHORE - The Lahore Chamber of Commerce and Industry, while calling for a downward revision of General Sales Tax to 12 per cent and bringing all untaxed sectors into the tax net, proposed the budget makers to broaden tax net by bringing the agriculture income in the tax net, as the sector contributes about 22 percent to the GDP but its tax share is almost zero. On the other hand the industrial sector contributes up to 65 percent to the revenue though its share in the GDP is 26 percent. The demand was raised at a pre-budget press conference jointly addressed by LCCI President Shahzad Ali Malik, Senior Vice President Sheikh Mohammad Arshad, Vice President Sohail Azhar and former SVP Abdul Basit. The LCCI office-bearers said that there should be no ST on essential food items, their raw materials, pharmaceutical products, their raw materials and educational material including stationery and printing paper. They also called for minimum rate of duty on the import of raw materials along with well-targeted measures to discourage import of finished products for the sake of promotion of domestic trade and industry. The LCCI office-bearers urged the government to rationalize levies on oil products as the fast going up oil prices are putting a very negative impact on economy and hitting all the sectors alike. To cope with energy shortages in the long run, they said that there was a dire need to focus on construction of water reservoirs as it is the only solution to ensure cheaper electricity. They also demanded withdrawal of increase in Turnover Tax and 25 percent flat rate of tax on AOPs. The LCCI office-bearers urged the government to bring down the interest rate to single digit for being a prerequisite to expedite the process of industrialization. They said that the taxable limit for income tax should be increased to Rs400,000. The Govt has introduced electronic system for the refund of sales tax we demand that the same shall be extended for income tax also. We also propose that all compliant and regular taxpayers shall be exempted from audit. This is a common practice of tax department to start process of audit once the refund is determined. This shall be stopped. We also urge the FBR to settle down concrete Audit parameters in consultation with the business community. In order to broaden the tax net, no new commercial utility connection shall be allowed without a valid NTN. The customs department treats importers differently at different ports and airports especially there is variance of rules at Karachi and other cities. The policy about loose cargo is also not same on the two ports. Furthermore 'CARE system of clearance shall be applied to other cities as well. Companies falling under the purview of Large Taxpayers Unit (LTU) have to bear brunt of repeated or frequent audits. This practice must be stopped. Presently, no compensation is allowed on holding back due refunds, the business community should be compensated if their due refunds are held back without any cogent reason. In case of default of a supplier for sales tax the buyer shall not be held liable if payment is made through cross cheque. It is very unprofessional to punish the buyer, in case of sales Tax default of the supplier. It is also proposed that ADRC of Sales tax should be revitalized. The sales tax input claimed by the buyer should be admitted if the supplier is not blacklisted at the time of making that claim or within six months. No arrest or FIR shall be registered against a taxpayer without giving him a show cause and the chamber should also be taken into confidence. And for this, the adjudication officer should not be below the rank of an additional commissioner. We urge the FBR to settle down concrete Audit parameters in consultation with the business community. Housing Sector should be encouraged and particularly Cooperative Sector should be promoted to boost up the construction industry and to generate the employment with a view to broaden the tax base. It was proposed that infrastructure bonds (as India did) shall be introduced to develop infrastructure in the country as well as tax credit shall be given on these bonds. In view of the low growth prospects, we believe that the revenue collection for FY2011-12 should be set at Rs.1699 billion. This seems rather realistic and appropriate for supporting fragile economic recovery underway. We believe the biggest hurdle in tax collection is the trust deficit between the tax payers and the tax collectors. Due to harassment of the tax officials the people are not willing to come into tax-net, the system of the tax department should be reformed to encourage new taxpayers. The discretionary powers of tax departments and its officials should be curtailed. The refund system of taxes needs to be improved in order to encourage the businessman to get registered. The time taken for refund of tax especially sales tax shall be improved. The laws and procedures of tax system should be simplified; further more number of taxes should be reduced by merging them. Individuals having turnover of Rs.50 million or more, are also declared as 'prescribed persons and required to act as withholding agents u/s 153 of Income Tax Ordinance, 2001. Therefore, anyone with more than Rs 50 million as turnover can automatically become the withholding agent and it is mandatory to deduct 3.5 percent as withholding tax. Hence, this step becomes illogical as many traders have over Rs 50 million in turnover. LSE rejects broker appeal OUR STAFF REPORTER LAHORE - The Appellate bench formed to hear the appeal of M/s Wasi Securities in the matter of the Arbitration Award passed in favor of an investor to the tune of payment of Rs14.5 million, has rejected the appeal of M/s Wasi securities. As a result of this, Wasi Securities has to comply with the payment of the aforesaid money to the aggrieved investor failing which M/s Wasi Securities may be expelled by the Board. It may be mentioned that the said arbitration award had been announced on Sep 1, 2009, but the same has been pending due to frivolous litigation initiated by Wasi Securities due to which the investor suffered for more than one and a half year. The matter of the expulsion of Wasi Securities is now held up because of another ad interim injunction granted by the learned Civil Court of Lahore. If expelled, all assets of M/s Wasi Securities (SMC-Pvt) Limited, corporate member, shall be forfeited by and vested in the Exchange, as provided in the Memorandum & Articles of Association and Regulations of the Exchange. On expulsion, the process of settlement of investors claims if any will be initiated in line with the relevant Regulations. However, the investors in their own interest are advised to file their claims against the member at the office of the Exchange as soon as the decision to expel is announced. The assets realized from Wasi Securities will be dealt with in accordance with the Regulations of the Exchange or as per direction of any other Court/Regulatory Forum.