AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, February 18, 2014 (PPI-OT): Muhammad Yasin Siddik, Chairman, All Pakistan Textile Mills Association (APTMA) has shown great concern over the government’s plans to increase sales tax rate on textile industry from the current 2 percent to 5 percent in the first phase and 17 percent in the next three years.
In a statement Chairman, APTMA said that the anticipated rise in textile exports through the relief obtained under GSP Plus Scheme granted by European Union would not be mitigated as there would be a liquidity crunch and compounded at a time when the government is the largest borrower from the banking system and why would the banks desire to lend to industry at the same cost as the government.
Yasin said that in case the sales tax is raised to 5% a massive amount of about Rs74 billion of only the textile exporters would get stuck-up with FBR (expected exports for the current fiscal year are estimated at $14 billion as the exports for the first half of the year was $6.95 billion without GSP Plus Status) which he believes is beyond the capacity of FBR to process and refund without any delay.
Previous practices had clearly demonstrated that this refund system gave rise to massive corruption and flourish the culture of flying invoices resulting in disbursement of more amount than the tax actually collected to the fraudulent importers.
The industry cannot afford the luxury of prolonged and expensive refund system as the cost of doing business is already higher than their competitors in the region, in terms of electric and gas rates compounded by prolonged shut down, higher mark-up rates and law and order situation.
Chairman APTMA said that FBR should overcome its weaknesses and improve its system of collection of taxes and should strive to increase the tax net rather than putting more burden on the existing taxpayers.
The Chairman APTMA appealed to the Prime Minister and Finance Minister to take cognizance of the situation and before taking any decision give an opportunity to stakeholders to be heard.
For more information, contact:
All Pakistan Textile Mills Association
APTMA House, 44-A,Lalazar,
Off: Moulvi Tamizuddin Khan Road,
Karachi -74000, Pakistan.
Phone: 0092-21-111-700-000
Fax: 0092-21-5611305
E.Mail: aptma@cyber.net.pk
Web Site: www.aptma.org.pk