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PTEA opposes sales tax increase & changes in tax regime
Feb '14
Pakistan Textile Exporters Association (PTEA) has strongly opposed the proposed increase in sales tax and changes in tax regime as this will negatively impact the textile exports and would cause to further squeeze the industrial activities.
PTEA Chairman Sheikh Ilyas Mahmood and Vice-Chairman Adil Tahir said, in a statement here today, that this move would adversely affect exports at a time when huge amount of sales tax refunds are already stuck up with the FBR and exporters are facing liquidity crunch and such changes in the tax regime would add fuel to the fire.
Textile export sector has already been reeling under severe energy shortage, hike in tariffs, squeezed industrial activities and high cost of production, they said. 
There will be no level playing-field to honest taxpayers instead it would only result in blockade of their capital in the shape of refunds, increase cost of doing business and shrink export turnover. They added that in the prevailing economic conditions, rising cost of production is the core issue for textile exporters and this increase in sales tax would have a negative impact on national economy and exports of the country. 
FBR should make efforts to bring the retail and untaxed sector into the tax net to enhance its revenue collection, instead of further taxing the ailing textile sector, they suggested.
Sheikh Ilyas was of the view that Pakistan is losing its ground and competitiveness against regional countries like China, India, Bangladesh, and Sri Lanka. Export sector must be facilitated to earn foreign exchange for the country and it should not be used for revenue collection as is done all over the world. 
FBR should evolve export-friendly policies as with increased exports they can raise revenue and country will also get foreign exchange and people will get employment,” he said.
FBR is not taking stakeholders on board and instead of widening tax net adopted traditional way to squeeze existing tax payers. Any move to add taxes to export sector would be a detrimental to the economy, he added.
Vice Chairman Adil Tahir said that at a time when textile industry needed export friendly-policies and conducive environment to reap maximum benefits of GSP plus, the efforts to retard the economic growth has been initiated. He said that on one hand, billions of rupees of exporters are stuck up with FBR in different refund regimes and on the other hand FBR is putting more burdens of tax on the taxpayers.
PTEA office bearers urged the Government to drop proposal for increase in sales tax and demanded to re-continue the zero rating scheme in the better interest of the industry. This would help to increase country’s exports and also attracts the industrial investment.

Pakistan Textile Exporters Association

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