Business community has opposed the decision of substantial raise in withholding tax on import of industrial raw material from 1 percent to 5 percent without taking the business community into confidence and realising the trade imbalance of the country.
Raising serious concerns on anti-industry and anti-export policy of the Federal Board of Revenue (FBR), MCCI said that authorities have taken short-sighted decision at a time when trade deficit of the country has already crossed the figure of $21.27 billion in fiscal year 2011-12 due to high imports of $44.92 billion against $23.64 billion low export.
President of Multan Chamber of Commerce and Industry Muhammad Khan Saddozai urged the FBR to withdraw anti-industry SROs, as on one hand, SRO 98(I) 2013 subjects industries to withholding tax of 20 percent of sales tax payable on purchases, and on the other hand, SRO 140(I) 2013 increases withholding tax from 1.0 percent to 5.0 percent on imports of industrial raw materials.
Muhammad Khan Saddozai said that export-oriented industry was already in shambles due to acute energy crisis coupled with impact of war on terror and the recent SROs will add further difficulties, creating liquidity problems for the exporters.
He said that manufacturers were already facing severe cash flow issues due to deduction of 3.5 percent withholding tax on supplies to customers as well as withholding tax at imports.