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ICAP submits budget proposals

KARACHI: The Institute of Chartered Accountants of Pakistan (ICAP) has suggested to Central Board of Revenue (CBR) that in order to enhance the present low level of number of income tax payees of the country, all tickets issued for foreign travels must have National Tax Number (NTN).

In its pre-budget suggestions put forward to Chairman CBR, ICAP said the mandatory inclusion of NTN on air tickets must be for tickets issued for Hajj, Umra and other religious journeys.

In case of dependant, travelling along with their elders tax number of the person paying for tickets should be included.

The ICAP has suggested that National Identity Card number should be national tax number to curb the tendencies of fake, fictitious and multiple tax numbers, which are helping the avoidance of payment of federal taxes.

The ICAP said, “Every taxpayer should have a unique tax number regardless of location, area/residency or registered office.

The ICAP said, “Establishing control over issuing and maintaining tax numbers may also help in broadening the tax base.”

The ICAP said that tax collected at source should only be accepted by the banks with the copies of NTN certificates of persons on whose behalf tax had been deducted.

In the real estate sector, ICAP has submitted that to encourage corporatisation of the real estate sector, and to rein in the misuse of the vehicle of cooperative societies in the real estate, it is suggested that cooperative societies involve in real estate business shall be deemed as company for the purpose of corporate and income tax.

For companies, it is suggested that corporate rate of tax should be same for all companies whether listed, non-listed or private limited companies. The ICAP has argued that difference in rate of tax between listed and non-listed companies has traditionally been psychological incentive for corporatisation in Pakistan.

“Maximum rate of tax for corporate entities should be brought down to 30 per cent,” it added.

For salaried class it is suggested that income slabs should be revised to apply the last slab of 35 per cent to income of Rs2.5 million.

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