PkRevenue.com – The Karachi Chamber of Commerce and Industry (KCCI) has called on authorities to implement a uniform withholding tax (WHT) rate for both commercial importers and manufacturers in the upcoming budget for 2024-25.
The KCCI’s tax proposal highlights the disparity in the current tax regime, where commercial importers face a 3.5% withholding income tax, while manufacturers are subject to a significantly lower rate of 1% under the stipulations of SRO-1125 dated December 31, 2011.
The KCCI has recommended a unified withholding tax rate of 2% for both manufacturers and commercial importers. This proposed change aims to promote fairness, enhance industry growth, and boost government revenue. By establishing equal tax rates, the KCCI believes it will create a level playing field and stimulate a more competitive business environment.
“Establishing equal tax rates for importers and manufacturers promotes fairness, industry growth, and government revenue,” stated the KCCI. The chamber emphasized that standardizing the income tax rate at 2% for all parties would help deter fraudulent practices, thereby enhancing the integrity of the industry.
The KCCI further argued that harmonizing tax rates under SRO 1125 ensures fairness and levels the competitive field, which can lead to increased government revenue. Equitable tax rates, according to the KCCI, foster fair competition, driving growth and innovation within the industry. This, in turn, stimulates industry growth and creates more job opportunities.
Moreover, the KCCI highlighted that improved compliance and reduced fraud, resulting from a standardized tax rate, would enhance revenue collection and benefit the national treasury. The chamber’s proposal suggests that fair tax practices not only support industry growth but also contribute to a more robust and transparent tax system.
The KCCI call for a uniform withholding tax rate comes at a time when the business community is seeking greater support and reforms to ensure sustainable economic growth. By addressing the tax disparity between commercial importers and manufacturers, the KCCI believes that the government can create a more balanced and equitable tax structure.
As the budget discussions for 2024-25 approach, the KCCI’s proposal is expected to be a focal point of debate among policymakers and industry stakeholders. The chamber urges the government to consider this recommendation seriously, as it promises to foster a fairer and more competitive business environment, ultimately benefiting the broader economy.
The KCCI remains committed to advocating for policies that promote industrial growth, fairness, and economic stability, and will continue to work closely with government authorities to achieve these goals.
