17pc sales tax on five zero-rated sectors should be abolished: Capt. A Moiz, Naseem Akhtar
Karachi, June 01, 2020: Capt. A Moiz Khan, patron-in-chief, North Karachi Association of Trade and Industry (NKATI) and President Naseem Akhtar have appealed Prime Minister to relief for export-oriented industries in the view of the severe economic crisis around the world, especially in Pakistan due to COVID-19 pandemic.
In appeal, NKATI leaders have requested that sales tax & other additional taxes on export-oriented industries should be abolished so that the production activities can be revived without any financial difficulties and increase in domestic exports can be made possible.
“For strengthen the country economically, it’s very important to give relief to the export industries as due to corona lockdown has badly affected the export industries and they facing financial crisis”, they said.
NKATI leaders suggested that SRO 1125 should be restored for five zero-rated sectors to facilitate “No tax no refund” for reducing production cost of export industries and enable exporters to compete in international markets.
“Pakistan should take economically advantage of the tension between China and the United States. Pakistan can increase global share by providing maximum facilities and tax relief to the export sector. Therefore, imposition of 17 percent sales tax on export industries is not a wise move”, they added.
Capt. A. Moiz Khan and Naseem Akhtar further said that the government first collects the tax and then refunds it the government collects the tax first and then returns it and mostly staff was busy in the extra work of tax refund. It is better to hire FBR staff to collect the tax, so a sales tax-free strategy should be adopted for the export industries and the decision to levy 17 percent sales tax should be withdrawn with policy of “No tax no refund” so that industries can promote exports.
They pointed out that after collection of sales tax from export industries if sales tax is refunded on fast track, it still takes 3 to 4 months for refund, which means that 64 percent investment of export industry is stuck for 4 months and they facing financial crunch.
NKATI leaders appealed to Prime Minister Imran Khan to restore SRO 1125 for five zero-rated sectors to boost exports so that the country can move on the path of rapid development.