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Textile sector derides VAT proposal
Apr '09
The Pakistani government had recently proposed to implement 18 percent Value Added Tax (VAT) on the textile sector in the upcoming budget, which all the textiles related trade bodies have unanimously rejected calling it arbitrary, considering the economic turmoil and the resultant slowdown affecting the sector.

The Towels Manufacturers Association, Textile Processing Association and Bedwear Exporters Association collectively requested the government to revisit its plan and said the new proposal was a replication of the GST and will hit the already declining textile industry in the country.

Instead of the earlier proposal to zero rate the sector, the government is adding to the burden of the sector, which will eventually lead to tax evasion, they allege. This will also eventually lead to a drop in exports from the sector, which is today contributing to 60 percent of exports from the country, they said.

They have rejected claims of the government that the sector was consulted on the issue, due to which the implementation of the VAT is being considered for the budget. They also said that taxes of such nature are being eliminated across most countries, while such out-dated taxes were being introduced in the country.

Fibre2fashion News Desk - India

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