The facility of 10 percent withholding tax exemption on power bills to be received by the zero rated industrial units of the five export-oriented industries like textile products, carpets, leather, surgical goods and sports goods, must be extended to other sectors to fulfil the need of justice.
President Punjab Economic Forum and the Lahore Chamber of Commerce and Industry's former president Mian Anjum Nisar stated this while talking to Business Recorder here on Friday. The Federal Board of Revenue before issuing notification of exemption to only zero-rated units of the five industries, should have reviewed the matter and take rational and realistic decision.
"If exemption of withholding tax was not possible to every industry, the FBR, which is likely to issue a notification to this effect within next few days, must facilitate at least those units receiving power bills with NTN and GST."
In the current budget, levy of 10 percent withholding tax was proposed on the power bills of all the industrial units exceeding Rs 20,000 but FBR is going to exempt zero-rated units of only five industries. "What is the fault of other industries," he questioned.
Nisar said the government will retain the industries' money for 12 months on account of withholding tax. The audit process will take three months while the refund process will take another three months, thus the industries' money will remain pledged with the government for 18 months, which is totally unjustified, he added. "FBR has failed to broaden the tax network as it is taxing only those which are already under its network," Nisar maintained.
He said the country's industry is suffering from severe liquidity crunch and this decision of the board would add to the financial burden. As a result, the local industry, which is already facing stiff competition in the world market, would be wiped out, leaving negative impact on the country's economy. "It would lead the local industries toward total closure, increasing country's dependence on imported goods to push the trade deficit up," he added.
Nisar said that instead of taking easy measures to achieve the revenue collection targets, the FBR should take rational steps to tap the hidden resources. He demanded of the FBR high-ups to review the matter and facilitate the industry across the board from the facility of withholding tax exemption. He also urged the board's authorities not to penalise the documented industry and look towards those which are out the tax net.