Sales tax on imported cotton to be removed: CBR chief

CBR Chairman Abdullah Yousuf on Monday said that sales tax on imported cotton is an anomaly, which would be soon resolved. Addressing member of Karachi Cotton Association he admitted that sales tax on imported cotton should be removed.
He said that the issue would be presented before the Anomaly Committee and soon it would be resolved.
The CBR chairman said that out of total Rs 52 billion, major chunk of Rs 25 billion went back to cotton and cotton-based products last year.
The sales tax on cotton had been a burden on the industry, which was removed.
He said the purpose of reforms was to accelerate growth, which touched 6.4 percent last year. "We would succeed in getting the growth at 8 percent in the next 2 or 3 years which is the only way to address our problems, specially the poverty and serious joblessness," he said.
He said both macro and micro indicators were encouraging, reflecting improvement in growth. He said CBR went through comprehensive restructuring which started in 2001 and its achievements would be completed in 2007. He termed the introduction of Universal Self-Assessment Scheme as a historic decision, which was part of the on-going reforms.
He said bulk of the cases went unchecked and only a part of the assessments were scrutinised under the scheme. But the experience was very encouraging. It convinced taxpayers to file returns, he added.
He said that automation would certainly minimise the interaction with the tax officials, which would reduce corruption. He said that corruption at lower level was possible in various departments of CBR.
He said electronically the system would be improved that could eradicate the problems of fake invoices. He said audit system was also needed to review and enhance its capacity. The system was required to bring at par with the international standard.
He said excise duty was a dying tax and would be replaced with sales tax.
He said that scanning of goods containers is required the world over and the cost was must for the exporters. However, he denied the impression that scanning could cost 80 to 100 dollars per container. It would cost 10 to 20 dollars per container, he said.
Earlier, KCA Chairman Iqbal Umar praised the efforts of CBR for protecting the interests of the industry and recent removal of sales tax on ginned cotton.