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Lahore Chamber presses govt for revival of industries

LAHORE: Lahore Chamber of Commerce and Industry (LCCI) President Mohammad Ali Mian has demanded that the government announce a package for the revival of the industry and businesses which are under tremendous pressure owing to multiple reasons including high oil prices and energy shortage.

He raised the demand while addressing a press conference on LCCI budget proposals for the year 2008-09 at the Lahore Chamber of Commerce and Industry on Tuesday. LCCI Vice President Shafqat Saeed Piracha and a large number of LCCI executive committee members were also present on the occasion.

He said the cost of doing business is increasing with every passing day as a result of the depreciating rupee against the dollar and high energy cost including electricity, gas and petrol. Under the circumstances, the limit of minimum exemption of Rs1 lakh has become very small and requires government attention for upward revision. Keeping in view the current business scenario, he proposed that the minimum exemption limit for business individuals be increased to Rs200,000.

Mian also urged the government to curtail the rate of sales tax from the existing 15 per cent to 10 per cent, as it had already been proved through various experiences that a cut in tax rate earns more revenue for the government.

He said that currently, manufacturers are issued registration certificates after field verification by the staff of concerned Collectorate. This not only results in a considerable delay but also in the loss of revenue to the government, as manufacturers continue making supplies, during the said period, without the payment of tax and issuance of invoices. He proposed that manufacturers be registered first and verification be conducted later by the Collectorate staff.

He deplored that the current quasi-judicial adjudication system is not producing the desired results and lacks the confidence of taxpayers.

Further adding that, since there is lot of delay at the Appellate Tribunal level; taxpayers are facing serious problems of recovery on the basis of order-in-original/order-in-appeal. He proposed revamping the quasi-judicial adjudication system.

A definition of ‘cottage industry’ was added vide clause (5AB) of section 2 of the Sales Tax Act, 1990 in the budget for the FY 2007-08. The ‘manufacturers’ whose annual utility bills exceed Rs600,000 are not considered as cottage industry and therefore need to be registered and pay sales tax on their supplies. The provision was added up on the strong representation by LCCI, however, it has been observed that during the year, no practical effort has been made by the government to bring such industries in the tax net, in spite of the fact that the data of utility bills is easily available. Such half-hearted measures increased non-compliance and nullified the impact of the changes.

He urged the government to allow all raw materials not produced in Pakistan, on zero duty, while the duties on finished products he added, should be enhanced to protect the local industries.

Mian warned that all government measures to revamp industries and reduce trade deficit would go in vain if the menace of under invoicing and wrong declaration of goods is not effectively controlled.

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