Federation of Pakistan Chambers of Commerce and Industry says WEBOC system requirements delaying exports

Islamabad, December 17, 2013 (PPI-OT): The acting president FPCCI Mr. Azhar Saeed Butt has taken notice of the delays in exports due to the new WEBOC system requirement of sales tax registration number for attaining I.D and password for exporters; especially one’s not claiming refund and/or exempt from Sales Tax Registration under the Sixth Schedule.

This has not only caused delays in exports but also resulted in cancelled export orders and loss of valuable foreign exchange revenues. Furthermore; it is discouraging exporter’s especially small exporters of the cottage industry and knowledge based products etc who are not required to register in the sales tax.

The acting president is of the view that at present earning foreign exchange is the most important requirement for the survival of Pakistan’s economy and exports is the single largest source of earning foreign exchange revenues for the country. Therefore, Pakistan needs to be an Export Oriented Economy and exports must be encouraged.

It is also the policy of the government that we must not rely only on select sectors for exports and find ways to increase the exports of Non-Traditional Products such as the Cottage Industry including Handicrafts and Knowledge Based Products including Software Designing etc. This sector has potential to develop provided they are properly facilitated and encouraged.

He further stated that all exporters are already in the tax net as no exports can take place without having the NTN number on the e-form. There are hundreds of small exporters in the country whose share in exports both in terms of numbers and value is significant and mainly deal in non-traditional items.

They mostly have low turnover and are not registered in sales tax as many of them fall under the category of cottage industry and are exempt from sales tax vide sixth schedule. They have very limited resources and burdening them with Sales Tax Registration would mean that they must employ additional help for compliance and missing monthly filing dates will mean additional penalties thus increasing their cost of doing business.

Furthermore; exporters who are not claiming refunds are contributing to the national economy by not only bringing foreign remittance into the country but also by not burdening the national exchequer through refunds.

Moreover; no such condition is applicable for exports in the neighbouring countries – India and Bangladesh and having it here in Pakistan will hamper our competitiveness. Moreover; many exports are seasonal and do not take place year round; therefore more so they should not be burdened with monthly fillings. This will be against the government policy of de-regulation and simplification of law.

He was of the view that far reaching negative impacts such as Increase in Cost of Doing Business, Discouragement to Export, Loss of Export Markets Especially in the Non-Traditional Sectors, Loss of Foreign Exchange Revenues, Reduction in Productive Employment Opportunities, Decrease in Poverty Alleviation, Widening of Trade Deficit and Burden on National Exchequer By Increase In Refunds will result if this policy is not reversed.

The acting president FPCCI strongly suggests that the requirement of Sales Tax Registration number in WEBOC system for generating I.D and Password for exporters should be removed altogether with immediate effect to facilitate current export orders and deadlines.

Furthermore; Exporters [Not Claiming Sales Tax Refunds] and other Exporters belonging to the cottage industry who are already exempt from sales tax vide the sixth schedule of the sales tax act 1990 should be exempt from mandatory Sales Tax Registration and be allowed to register in WEBOC without sales tax number requirement.

For more information, contact:
M.A.Lodhi
Secretary General
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Shahrah-e-Firdousi,
Karachi-75600, Pakistan
Tel: 0092-21-35873691, 93-94
Fax: +9221 3587 4332
Email: info@fpcci.com.pk
URL: www.fpcci.com.pk