The Federal Board of Revenue (FBR) has come out with a scathing indictment of the textile sector, which states, that the sector which generates nearly 60 percent of all export revenues, is a recipient of a big amount of refunds from the government.
The 'Third Quarterly Review done by the FBR contains a report on the tax contribution from the textile sector and states that the FBR is paying huge amounts of refunds and rebates, including a provision of zero-rating on sales tax.
But this they aver has not provided the desired results. The reports adds that tax collection from the sector is in negative territory, since the receipts are less than the refunds and rebates that the sector enjoys, due to its exalted status.
Providing statistics, the report reveals that, the extent of negative collection was Rs 25.9 billion in 2004-05, which to Rs 1.1 billion in 2007-08. However, provisional figures up to March 2008-09 point out that the negative collection has again jumped to Rs 5.5 billion.
The net revenue loss will be much higher if the refunds claimed under the head of income tax are included and FBR has suggested setting up a committee which would include stake holders and government officials to resolve issues of non-compliance.
Fibre2fashion News Desk - India
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