ISLAMABAD - President Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Zakaria Usman has urged the Federal Board of Revenue (FBR) to do away with the discrimination in duties and taxes between commercial and industrial importers of raw material.
In a press statement, the FPCCI chairman said the raw material is ultimately consumed by the industry at small, medium or large scale- and causes corruption, creates distortion in promotion of tax culture and is prone to misuse. The FPCCI Chief, as an instance, referred to SRO 1125(I)/2011 and elaborated that a commercial importer of polyester filament yarn, a basic raw material for the domestic fabric industry, is additionally subject to Value Added Tax (VAT) @ 2pc and withholding Income Tax @ 3pc due to which his cost of import is @ 4.51pc higher than that of industrial importer which is subject to value added tax (VAT) @ 0pc and withholding income tax @ 1pc only.
“This is a sufficient incentive and motivates the unscrupulous commercial importers to import the raw material under the guise of manufacturers thus rendering the genuine commercial importers uncompetitive besides, making the national exchequer to suffer from heavy losses as more than 70pc of the domestic demand of Polyester Filament Yarn is met through imports”, he added.
The President of the FPCCI, Zakaria Usman appreciated the Prime Minster Mian Muhammad Nawaz Sharif for constituting a Committee to review the concessionary regime (SROs) under the Chairmanship of Ishaq Dar, Federal Finance Minister and disclosed that Pakistan, with its limited capacity is suffering huge amount on the above cost.