Home / Knowledge / News / Textiles / Yarn merchants seek withdrawal of turnover tax rate
Yarn merchants seek withdrawal of turnover tax rate
07
Aug '10
Pakistan yarn merchants are worried over the complex and anti-business taxation policy and hence, have warned that if the new turnover tax rate is not removed with immediate effect, then yarn traders would shut their businesses in protest, leading to job loss of thousands of wage earners.

As per Muhammad Ashraf Gandhi, former Chairman of Pakistan Yarn Merchants Association (PYMA) and central leader of Action Committee, the turnover tax rate would be applicable to all yarn trading firms, APOs and individuals who have a turnover over Rs 50 million.

Gandhi also informed that, this new turnover tax rate is being hiked from 0.5 percent to 1 percent, under the new regulation in the Finance Bill. This is said to be quite economical considering the profit margin for yarn traders, which is low.

Therefore, anyone with more than Rs 50 million as turnover can automatically become the withholding agent and it is mandatory to deduct 3.5 percent as withholding tax. Hence, this step becomes illogical as many yarn traders have over Rs 50 million in turnover.

Gandhi further added that, the increased turnover, was a result of the rise in yarn prices and also because the textile business is one with high-volume and low profits. More so, if a yarn trader pays 3.5 percent as withholding tax, then it is likely that he is earning around 10 percent as profit, which is not possible in case of textile business. At an average, the regular profit margin of a yarn trader is just around 1-2 percent.

However, Gandhi fears that, in the above process, a yarn trader, who provides the end user with certain finances, will be removed by this harsh tax. Hence, Gandhi has urged the government to withdraw the turnover tax as soon as possible for the best interest of the textile segment, especially the small scale manufacturers, who are operating as vendors for big and medium textile producers and processors.

Fibre2Fashion News Desk - India

Must ReadView All

Courtesy: House of Fraser

Textiles | On 27th Apr 2017

House of Fraser's online sales up 16.1%

British department store group House of Fraser's online sales have...

Textiles | On 27th Apr 2017

Rieter completes 20 years of launching Com4 yarn

Rieter, the world's leading supplier of systems for short-staple...

Textiles | On 27th Apr 2017

Walmart releases 10th Global Responsibility Report

Walmart has released its tenth annual Global Responsibility Report,...

Interviews View All

Victor Chao
Esmetex

‘In future, clothing boundary lines will become increasingly blurred.’

Abhishek Ganguly
Puma India

‘As a brand, Puma is always looking for new and innovative ways to inspire ...

Abhishek Samdaria
Reflete

GST will certainly reduce a lot of paperwork in future

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search