The Zonal Chairman, Pakistan Readymade Garments Manufacturers & Exporters Association (Prgmea), Shaikh Mohammad Shafiq has strongly criticised the FBR for extending the Sales Tax Withholding Regime through its notification SRO 98(1)72013, dated 14-02-2013 according to which all companies including exporters will be subjected to Withholding Tax at one-fifth (l/5th) of the applicable rate of sales tax on all purchases.
He said that this move was purely a revenue generation measure meant to bolster the numbers of the incompetent FBR. This measure would further fuel inflation in the country and the direct burden would be on domestic consumers and international buyers of Pakistan textiles and garment industry. Through this measure, raw material will become more expensive for companies, which would mean higher prices for consumers, already suffering heavily due to run-away inflation. This also meant that Pakistani value-added garments would become more expensive and would no longer be able to compete with competitors like India, Bangladesh and Vietnam. He said that they were already facing multiple problems such as strikes, law-and-order situation and foreign buyers had stopped coming to Pakistan. This additional burden would mean that they had no other choice but to close down their businesses and move their capital abroad. Shafiq requested an urgent SOS to the FPCCI and other associations in the value-added sector to force the government to roll back this anti-business measure.-PR
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