- The OICCI has recommended a corporate tax rate of 29%.
- It says that the general rate for minimum tax should be reduced to 0.25 percent.
- The body says that annual income up to Rs 12 lakh is tax-free.
ISLAMABAD: The Overseas Investors Chambers of Commerce and Industries (OICCI) has asked the government to abolish super tax and tax the trade, services, real estate and agriculture sectors according to their share in the economy. Bring in the circle.
OICCI presented its proposals regarding taxation. Budget 2023-24 To Finance Minister Ishaq Dar
The body recommended abolition of super tax for all sectors and capped corporate tax rate at 29 percent. It suggested that the effective tax rate should not be increased further as it is already higher than regionally competitive rates.
The general minimum tax rate should be reduced to 0.25% and a minimum tax credit carry-forward should be allowed for at least five years before 2022, as suggested by the OICCI.
The Overseas Chamber also recommended simplification of the withholding tax system, which currently has 200 different tax rates for 24 withholding tax sections, to make it more convenient and business-friendly.
Given the huge impact of inflation on the low-income group, the OICCI has also recommended that annual income up to Rs 1.2 million be tax-free as against the current Rs 0.6 million per annum.
“The economy is currently under stress and the forecast for gross domestic product (GDP) growth, including large scale industries, is negative to marginally positive for the immediate near term, with very high inflation and interest rates. And with a rapidly weakening currency, OICCI president Aamir Pracha said there is potential for tax-paying sectors’ profits to decline substantially next year.
The body stressed the urgent need to widen the tax base to increase revenue collection proportionately to each sector of the economy, particularly trade, services, real estate and agriculture.
It is estimated that with dedicated efforts to collect revenue from all segments of the economy, the tax-to-GDP ratio can be increased from the current low of 10 percent to 16 percent.
Originally published in The News.