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Textile exporters protest levying of income tax on R&D subsidy

01 Jul '09
1 min read

The exporters of the textile sector including the members of Pakistan Bedwear Exporters Association and Pakistan Knitwear Association have received notices from Income Tax Department to recover income tax on R&D support given by the government.

The Federal Advisor on Textiles, Dr. Mirza Ikhtiar Baig has received several complaints from these exporters regarding income tax recovery.

He explained in a letter to the Chairman of Federal Board of Revenue (FBR) that as per the policy, R&D support to the textile and garment export units is allowed for activities such as Product Development, R&D skill development and training, up-gradation of Information Technology and professional consultancy.

These export units have been obligated to show the said R&D support as expenditure in their annual accounts and balance sheets, so the question of income does not arise.

Dr. Baig requested the chairman of FBR for his assistance in this matter and to resolve it and since the textile industries are experiencing down fall in exports, this move would affect these exports more.

Fibre2fashion News Desk - India

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