Monday June 17, 2024

Budget proposals: OICCI seeks abolition of super tax

By Mehtab Haider
June 05, 2023

ISLAMABAD: Overseas Investors Chambers of Commerce & Industries (OICCI) has asked the government to abolish super tax and bring trade, services, real estate and agriculture sector into the tax net in line with their share in the economy. The OICCI presented its taxation proposals for 2023-24 budget to Minister of Finance Ishaq Dar. OICCI recommended the abolishment of super tax for all sectors and capping the corporate tax rate at 29 percent. It suggested that no further increase in effective tax rate should be made as it is already greater than the regional competitive rates. The general rate for minimum tax should be reduced to 0.25 percent and carry forward of minimum tax credit be allowed for at least 5 years as prior to 2022, recommended the OICCI. The overseas chamber also recommended the simplification of withholding tax regime, with existing 200 different tax rates for 24 WHT sections, to make it more convenient and business friendly. Given the very high inflation impact on the low income group, OICCI has also recommended that the annual income up to Rs1.2 million be tax free as compared to the current Rs0.6 million annually.

Economy is currently under stress and GDP growth forecast including for large scale industries for the immediate near term is negative to marginally positive, which along with super high inflation and interest rates and fast weakening currency, has the potential to substantially dent the profitability of tax paying sectors next year,” said OICCI president, Amir Paracha. OICCI stressed the urgency for broadening the tax base to boost revenue collection according to the proportionate share of each sector of the economy, especially trade, services, real estate and agriculture. OICCI has estimated that with dedicated efforts to collect revenue from all segments of the economy, the tax-to-GDP ratio can be increased to 16 percent from current less than 10 percent.