Following the imposition of high taxes in budget 2013-14, a number of shipments have been withheld at China, UAE, Hong Kong, Indonesia, Thailand, etc, due to expected hike in the prices of imported goods. According to market sources, after the imposition of high taxes on imported items, the prices of goods especially made-up articles are expected to increase twofold, which would hit the masses hard.
"Although the newly elected government claims to discourage SRO culture, it has withdrawn tax exemptions on finished leather articles, textile, carpets, surgical and sports goods through SRO 504(I)/2013 in budget 2013-14." "On one hand, the government is going to snatch purchasing power of the masses and on the other, the initiative of high taxes in this budget would encourage smuggling culture."
Arshad Jamal, Senior Vice President, All Pakistan Customs Agents Association (APCAA) says, "Earlier, the expense to clear imported fabric was Rs 88.42 per kg and the importer used to pay 12 per cent custom duty, 2 per cent sales tax, 3 per cent income tax and 2 per cent additional tax".
However, after high rate of taxes imposed in budget 2013-14, the clearing expense of same goods would be Rs 184.26 and now the importers will have to pay 12 per cent custom duty, 17 per cent sales tax, 5 per cent income tax and 3 per cent additional tax," Arshad says.
"Similarly, the clearing cost of imported blankets, which was earlier Rs 74.57 per kg, is now escalated to Rs 135 per kg. Resultantly, the price of cheap and low quality blankets, which were earlier available at Rs 1000, would now be sold at double the price."
He says, "economic managers with no sense of ground realities of the country's economy have just done simple accounting in budget 2013-14 that would not only open doors for corruption in tax departments but also create adverse impact on common man's life."
Moreover, Arshad says, "Large number of consignments have been stopped at China, UAE, Hong Kong, Indonesia, Thailand, etc, as importers are reluctant to pay high taxes during unabated economic meltdown where traders are facing deteriorating law and order situation; paying heavy ransom to extortionists." "On the other hand, law enforcement agencies have failed to come up with a comprehensive strategy to root out unscrupulous elements from the country."
"The orders of over 150 consignments of blankets have been cancelled and further consignments of several other made-up articles are in process of annulment, due to expected high rate of taxes," he said. When contacted, a leading commercial importer of readymade garment on condition of anonymity said, "Although the ultimate sufferer of this budget would be the common man, it has provided a lucrative opportunity to the tax department and importers to get huge undue gains."
He dispelled the impression that the government would generate substantial revenue through high taxation, saying that the government would face considerable revenue dip in next fiscal year. He said, "If the rates of taxes were not revised, almost 80 to 90 percent of commercial cargoes would enter the country in the guise of Afghan Transit Trade or via Karakoram border with a fix tax rate of Rs 0.3 million that would only benefit certain taxmen and importers but would create adverse impact on revenue collection and common man's life."
Replying to a question, he said, "The most appropriate way to generate substantial revenue is that the government should revise tax rates at rationale level to avoid illegal trade and underinvoicing besides taking stern measures to curb malpractices in the tax department."
Comments
Comments are closed.