Pakistan Customs has increased withholding tax upto 2.75 percent on import of pulses after the promulgation of the new ordinances. Importers told Business Recorder on Friday that with the announcement of the new presidential ordinances, customs have increased withholding tax on import of pulses from 2 percent to 2.75 percent.
However, they said the raise is contrary to the announcement because as per the amendment, withholding tax should have been increased by only 15 percent, while the rate charged by customs is about 37 percent. Importers also registered strong protest with Salman Siddique, Chairman Federal Board of Revenue (FBR), on Friday at a meeting at Karachi Chamber of Commerce and Industry (KCCI).
"The FBR Chairman has admitted that this is an anomaly and asked the importers to sent letter," said Anis Majeed, Chairman Karachi Wholesale Grocers Association (KWGA). He said after the announcement of the amendment to the tax system, the customs raised duty by 100 percent and forced the importers to pay withholding tax as per the new slab, of which some consignments of imported pulses have also been released after payment of 4 percent tax.
He said that actual increase in the withholding tax on the import of pulses is 0.30 percent and the new rate should have been 2.30 percent instead of 2.75 percent. "We have met the FBR Chairman and Chief Collector Customs Razia Sultana and both have endorsed our point of view, however the chairmen have asked for complaint about the anomaly in writing," Majeed said.
He said that increase in the withholding tax on import base would definitely push up the prices of commodities in the domestic market, resulting in high inflation. Majeed urged the government to exempt pulses from current increase as prices of these essential items are already on higher side and directly affecting the poor people.
Following the import policy, customs is also creating hurdles in the import process, asking for shelf life (expiry date) of pulses at the time of import. This condition doesn't apply to pulses as it is being imported like raw material, he said. He urged the FBR Chairman to take up the issue and announce new directives in connection with withholding tax and shelf life of pulses.