He further emphasized to remove sub-rule (a) of rule 3 of the sixth schedule because if it all this was to be continued then the deeming of income of an employee may be restricted to 10% of salary only and the restriction of monetary amount of Rs 150,000 per annum may be removed. Moreover, he said that the corporate tax rate was comparatively higher as compared to other tax regime both in developing and developed economies. Further, presently rate of taxes on the higher class of income are not as high as it should be.
Therefore, the present policy of reduction in corporate tax rates should be continued. In order to promote listing of companies, the corporate tax rate for listed companies should be at least 5% lesser than the rate for non-listed companies. In addition, progressive based taxation should also be introduced for the companies and this could be achieved by introducing slab based taxation as like individuals & AoPs.
He proposed that the position prior to Finance Act, 2015 was re-enacted and the tax withheld at source was considered as advance tax and too, invariably for whole of the corporate service sector entities. He also recommended removing provisions of super tax in next fiscal year.
Siddiqui said that new manufacturing units should be allowed the exemption invariably based on their manufacturing capacity; adding that tax credit under section 65E of Income Tax Ordinance 2001 should also be extended to investment in factory building and manufacturing related infrastructure.
Meanwhile, Mazhar Saleem Shah, senior Director, M/s KPMG Taseer Hadi & Co, who delivered his speech on indirect tax, said that Bar had proposed 10% standard rate on local supplies and plus 3% value addition rate on commercial imports with high margins.
He said that minimum value addition rate on import of luxurious items may however be enhanced in between 5 per cent to 7 per cent; adding that reduced rate would broaden tax base and high value addition on imported luxurious goods would also support the local industry.
He said KTBA had also recommended that the registered supplier of taxable supplies should be allowed to adjust its input tax against total output tax inclusive of 'further tax'. Moreover, he proposed the FBR to allow input tax adjustments on building/construction materials for business purposes and also on taxable services irrespective of the provincial rates of sales tax. A large number of members attended the seminar.