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Cotton business in lurch over new tax
21
Mar '11
In an uncommon move, the Federal government of Pakistan has imposed a number of taxes on several industries, which includes sales tax on cotton and textile trade, which have a bearing on the fibre manufacturers, ginners and other segments down the value chain.

However, the trade and industry has urged the government to withdraw such duty imposition, but as the government has still not cleared its point, due to which domestic cotton sales are feeling the heat.

The All Pakistan Textile Mills Association (APTMA) has urged the Federal Board of Revenue (FBR) to withdraw the 17 percent sales tax levy on cotton ginners and fibre manufacturers, to ensure zero tax regime for the entire textile export chain.

According to the APTMA Chairman Gohar Ejaz, there is some sort of uncertainty as regards the impact; the March 15 order issued under the Presidential Ordinance would lay on the sector. Also, majority of the textile sub segments too have strongly condemned the new tax measures claiming that, these measures would not only strangle textile exports but would also give rise to large-scale corruption.

Due to all this, the industry leaders are lobbying against the government for withdrawal of the tax implications, but, meanwhile a majority of the trade activities in the cotton and textile business is stagnating.

Further, the traders claimed that, in case of bulk exports of textile products, the new sales tax provisions would not only unnecessarily impede the trade but would also breed large scale corruption provoked by outside sources who actually do not represent the cotton industry.

Due to all this, the industry leaders are lobbying against the government for withdrawal of the tax implications, but, meanwhile a majority of the trade activities in the cotton and textile business is stagnating.

Further, the traders claimed that, in case of bulk exports of textile products, the new sales tax provisions would not only unnecessarily impede the trade but would also breed large scale corruption provoked by outside sources who actually do not represent the cotton industry.

Fibre2fashion News Desk - India


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