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APTMA not against taxation but collection mechanism
Dec '10
Chairman All Pakistan Textile Mills Association (APTMA) Gohar Ejaz is all set to make another attempt convincing the government on continuity of zero rating regime for textile industry under the Reformed General Sales Tax (RGST) on December 7, 2010 to the Sub-Committee of Standing Committee of the National Assembly on Finance, Revenue and Planning & Development.

APTMA is not against the imposition of RGST for collection of revenue but it is suggesting a mechanism where intermediary process from cotton to finished fabric may be zero rated. Accordingly, the finished fabric and garments export should be zero rated and local sale may be charged 15% RGST. This would ensure collection of Rs25 billion tax on local sale and there would need of collection by the FBR for refunds.

Earlier, APTMA had detailed presentation to the Standing Committee of the National Assembly with Fauzia Wahab in the chair. The convincing arguments put forward by the APTMA pushed the government to constitute a Sub-Committee of the same Standing Committee with Begum Shahnaz Wazir Ali in the chair to reconsider its point of view. Other members of the Sub-Committee include Mr Shahid Khaqan Abbasi, Mr Faisal Saleh Hayat, Ms Kashmala Tariq and Mr Abdul Rashid Godil.

It may also be noted that Chairman APTMA Gohar Ejaz was due to visit Turkey on the occasion of Prime Minister Yusuf Raza Gilani tour on December 6, 2010. But the urgency of matter propelled him to stay back and attend the December 7 meeting to pave the way for a prudent decisive moment in the National Assembly on continuity of the zero rating regime for textile industry under the RGST.

Chairman APTMA Gohar Ejaz has appreciated the government for reconsidering APTMA viewpoint on the issue and expressed the hope for continuity of zero rating regime for the textile industry under the RGST.

Chairman Federal Board of Revenue (FBR) is a very positive man trying his level best to evolve a consensus on a reasonable outcome of the ongoing debate on zero rating regime between the government and the APTMA, he added.

He said the APTMA was fully supportive to the idea of documentation of economy through consumption tax. However, he clarified that the textile industry was already documented and contributing to the national exchequer.

He said the APTMA was trying to convince the government that there is no need of withdrawing zero rating regime from six stages of export-oriented textile industry, as it would lead to Rs390 billion adjustment during a year in the whole textile process and Rs127 billion of net refund after adjustment, causing serious liquidity crunch and threat to the viability of the largest export industry having earned $10 billion during last fiscal year and a potential to earn $15 billion during current year.

Gohar said the government should impose consumption tax on domestic sale of finished textile products and keep zero rating intact for cotton, yarn and fabric.

All Pakistan Textile Mills Association (APTMA)

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