Discrimination in taxes between Commercial and Industrial Importers causing billions of rupees Revenue loss to exchequer: Shahid Vaseem
Karachi, June 24, 2019 (PPI-OT): Shahid Vaseem, Chairman PCDMA, point out that discriminatory behaviour of FBR is causing heavy loss to exchequer, as imports of raw materials by industrial importers are given a favourable treatment compared to import of raw materials by COMMERCIAL IMPORTERS. It is estimated that the loss may extend to 50 billion rupees per annum.
Chairman PCDMA said, this inequality in taxes attract unscrupulous person to import raw material in the grab of industrial importers and sell it in the open market. Therefore, destroying the legitimate business of COMMERCIAL IMPORTER, as their import cost is higher than the cost of industrial importers.
The closed industrial units and many units in operation are also taking advantage of their flawed and skewed policy and they import raw material beyond their actual consumption and sell them in open market to make profit and destroy the business of commercial importers. Heavy imports of 1-2 million ton of plastics, iron and steel (CRC and HRC) about one million tons, Chemicals and papers by Industrial Importers are eye opener to justify our claim, he said.
Shahid Vaseem further said , Withholding income tax paid by commercial importers at import stage is 6% non-adjustable whereas industrial importers pay 5.5% which is adjustable/refundable and they also get exemptions certificate for further import when their tax reaches last year tax limit. The effective rate of 6% becomes 8-10% depending on rate of Custom duty as WHT is applied on C and F value + Custom duty +Sales Tax. Further this 6% WHT on net profit would mean a gross profit rate (G.P) as high as 30-35 % minimum which is quite astonishing. Despite all this now Commercial Importers are dragged into MINIMUM TAX REGIME (MTR) from previous FINAL TAX REGIME (FTR) which is quite inequitable.
Chairman PCDMA said, there is a misconception about UNDER INVOICING BY COMMERCIAL IMPORTER. It should be noted that there is no such involvement possible as the raw materials imported by Commercial or industrial importer are cleared in customs on same parameters and they are assessed as per periodical international price scan, valuation rulings, custom data etc.
Hence, the allegation that commercial importers of raw materials are involved in under invoicing is totally baseless and is based on biased and prejudice mentality. Chairman PCDMA strongly suggests FBR to give a level playing field to commercial importer of industrial raw materials as they are meeting the requirement of small and medium industrial units and pay their taxes honestly.
For more information, contact:
Pakistan Chemicals and Dyes Merchants Association (PCDMA)
Chemical and Dye House, Rambharti Street,
Jodia Bazaar, Karachi-74000
Tel: +92-21-32432752, +92-21-32439124
Category: General Business News