LAHORE: The Cement Dealers Association of Pakistan has announced an immediate strike after rejecting the withholding tax.
“No cement dealer will pick up cement from the companies from today,” said Patron in Chief of the Association Chaudhry Muneer at Lahore Chamber on Saturday.
“The tax target has been increased but the business opportunities for traders and industrialists are being reduced. The higher the tax, the more people will go for tax evasion,” said the Chairman of the Association Sajid Chaudhry on the occasion. He added that one cement bag is now available in Rs1500 due to the harsh measures announced in the budget as they have significant negative impact on overall cement distribution system.
Sajid said in the recently announced Federal Budget (Finance Act) the government has increased withholding tax (U/s 236H) from 1% to 2.5% for non-filers while turnover tax has also been implemented on dealers/retailers. “The impact of above taxes are huge and cannot be met from the rebates and discounts received from cement companies neither can it be earned from the market as cement falls under schedule 3 of the Sales Tax Act,” reasoned Sajid.
Also, he added, dealers/retailers are being harassed to install Point of Sales (PoS) with the plea that cement is fast moving consumer goods (FMCG), whereas it does not fall in the definition of FMCG. “Majority of the dealers and retailers are uneducated and incapable of maintaining records and/or operate on Point of Sales (PoS) as required by FBR,” said Sajid. He said that dealers/retailers are not in a position to continue their businesses due to such huge taxes and FBR staff harassment on Point of Sales (PoS).
Sajid said the Cement Distributors Association urges the government to intervene in the matter in order to resolve the issue by allowing presumptive tax regime otherwise dealers/retailers will have no option but to close their businesses resulting in increased unemployment, which would eventually affect the businesses of 50 other allied industries and will cause huge revenue loss to the national economy.
Meanwhile, the All Pakistan Cement Dealers Association delegation called on LCCI SVP Zafar Mahmood Chaudhry. The delegation stated that the tax target has been increased, but business opportunities for traders and industrialists are being reduced. They demanded that the Rs10 trillion allocated for MNAs should be used to provide relief to the industry. They also suggested deferring the Benazir Income Support Program for a year and providing relief to industries.
Zafar Mahmood Chaudhry mentioned that the current budget comprises 52% interest, with the industry contributing 19% to GDP and agriculture 26%. He pointed out that the Pakistani public does not receive facilities commensurate with the taxes they pay.
Sajid Chaudhry highlighted that their biggest issue is withholding tax. He explained that a 0.5% tax is imposed on filers, while non-filers face a 2.5% tax. He further stated that cement dealers have been designated as agents to collect this tax and that the cement sector has been included in FMCG.
Senior Vice President of the Cement Dealers Association, Hassan Naz, mentioned that filers cannot be charged 35 rupees less and non-filers at a higher rate. He appealed to the FBR and the government to find a solution to this issue.
Chairman of the Cement Dealers Association Sheikh Abdul Majeed said the FBR has not been able to register people in 76 years, so how can they expect us to do it. He questioned how taxes would be collected if business activities are hindered.
Patron-in-Chief of the Cement Dealers Association Chaudhry Munir requested the Lahore Chamber to arrange meeting with the Chairman of the FBR. He stated that many retailers are uneducated and cannot be subjected to such taxes. The cement dealers announced a strike, declaring that they would not take any cement supply from any company after midnight tonight.
Copyright Business Recorder, 2024
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