The Pakistan Footwear Association (PFA) has made various suggestions regarding Income & Sales Tax in the fiscal budget for 2021-2022.
Besides Income Tax & Sales Tax, the 25-point recommendations include suggestions to reduce various duties & tariffs and to implement policies that benefit the footwear sector to promote and pursue the “Made In Pakistan” policy.
The recommendations proposed by Pakistan Footwear Association President Mr. Muhammad Imran Malik with regards to Income Tax include: The surplus Income Tax amount paid this year should be carried forward next year and adjusted against the Income Tax due, next year.
Exemption should be given from minimum Income Tax. Similarly, the percentage of Depreciation Allowance for the Plant, Machinery and Equipment to be reinstated stored at 50%, and for the buildings it should be restored to 25%.
And the tax credit for investment to be restored to 10% and instead of the business, the Income should be made as the base.
Moreover, exemption of Income tax on dividends, for the companies in the Green Field Industries & in the Special Industrial Zones.
Gradual adjustment of the Corporate Income Tax from 29% to up to 25% and abolishment of Advance Income Tax.
The tax charged on shareholder’s dividend to be reduced from 15% to 10% and termed should be extended for business losses from 5-years to unlimited.
Similarly, for the sales tax: Sales tax on Retailers to be reduced up to 8%; Additional tax should be a part of the Output Tax; Sales tax on Small Retailers & Wholesalers tax should be brought from 17% to 10%; Sales Tax Refund to be adjusted against the Sales Tax; Viable solutions should be implemented at STA for the due Income Tax; Permit Zero rating on Sales Tax against the IOU Manufacturing Bonds, utilized against the purchase of locally manufactured material.
The PFA present suggested that Form C’s submission date to be strictly implemented from the end-of-the-month to the 10th of following month and unregistered dealers should be brought into tax-net.
Business which has a history of full compliance with FBR, should be exempted to pay 14% instead of 17% on all materials.