Lahore: The Punjab Finance Minister Mahkhdoon Hashim Jawan Bakht has said that Federal and Punjab Budgets for the financial year 2021-22 will be pro-business.
Tax reliefs were given in the Punjab Budget 2020-21 and the same approach will be adopted in the upcoming budget.
The Minister was speaking at the Lahore Chamber of Commerce & Industry along with Punjab Revenue Authority (PRA)Chairman Zain ul Abidin.
Makhdoon Hashim Jawan Bakht said that in upcoming Punjab Budget, a package of Rs10 billion would be given to enhance the global competitiveness of our industry.
“The testing lab facility will be part of the package”, he said adding that testing labs are being set up for the food and drugs sector. He said that the business community will be consulted for a special package
About Punjab Infrastructure Development Cess, the Minister said that the feasibility in this regard will be completed within three months and if the study will support and help to restore the activities at dry ports, Punjab Infrastructure Development Cess will be abolished.
“We are committed to giving more tax relief to the businessmen in the next financial year”, the Minister added.
LCCI President Mian Tariq Misbah said that the imposition of Punjab Infrastructure Development Cess at the rate of 0.9% on Dry Ports in Punjab has prompted many businesses based in Lahore and other parts of Punjab to get their consignments cleared from Karachi.
This has resulted in tremendous loss of business volume at Dry Ports in Punjab, shifting of Tax revenues from Dry Ports in Punjab to Karachi and hampered the businesses of Clearing Agents and Transportation Companies that provide sizeable employment. He demanded the removal of this Cess in the provincial budget 2021-22 to ease out the business community and revive economic activities at the Dry Ports.
Mian Tariq Misbah said that the constant reduction in the Annual Development Program (ADP) expenditure over time from Rs576 Billion in 2017-18 to Rs.350 Billion in Budget 2019-20 and Rs337 Billion in 2020-21 has impacted the development activities and resulted in an economic slowdown in the province.
He said that there should be a considerable increase in the size of ADP for the year 2021-22 to stimulate economic activity in the province.
The LCCI President said that export-oriented industries in Punjab should be given financial support by the Government of Punjab through the Annual Development Program (ADP) for getting costly international certifications.
Allocations should be made in the Annual Development Program (ADP) for the up-gradation of existing Testing Laboratories in Punjab to bring them at par with international standards for serving the export needs of industries like Pharmaceuticals, Halal Food, Leather and Rice etc. He added that the facility of Testing Laboratories and Standard Certification should be provided, especially in the Special Economic Zones (SEZs) in Punjab.
He said that Sales Tax on services is being charged at different rates by Punjab Revenue Authority (16%) and Sindh Revenue Board (13%) which creates an environment of competition among the provinces. He said that there is a dire need for harmonization among the provincial and federal tax collecting agencies. If the service provider is resident in Punjab and the service recipient is in Sindh, then both are required to pay sales tax on services in their respective provinces. To avoid this dual taxation, the revenue authorities of the provinces should agree on jurisdictions and common rules.
Mian Tariq Misbah said that the number of Taxes in Punjab is more than 100 which need to be rationalized. Similarly, the frequency of Tax Payments in Punjab (e.g. 12 payments per year for Social Security-PESSI) is also very high which needs to be decreased.
“SMEs only get 7% of private sector financing and around 65% of the SMEs are based in Punjab. Although State Bank falls under the domain of Federal Government still we expect the Government of Punjab to take special measures for facilitating the access to credit for SMEs at affordable rates without collateral”, the LCCI President added.
He said that the high rate of conversion fee(20% of DC value) for land use charged by LDA for existing units and 10% for new industrial projects with a minimum investment of 2 Billion Rupees on 20-acre land is an impediment to Industrialization in the province and should be abolished.
“If due to a certain reason, a business is not able to file its return or submit a certain form within time, then the concerned tax authority should not penalize through the imposition of heavy fines as it creates an environment of harassment. Instead, the tax authorities should organize awareness sessions in collaboration with leading Chambers of Commerce to educate the business community about filing their returns within time”, he concluded.