Pakistan Chemicals and Dyes Merchants Association (PCDMA) has opposed SRO 212(I)/2013, which will charge one percent withholding tax on imports made by five leading export sectors and three percent tax on imports of commercial importers as per SRO 1125(I)/2011.
In a communication to FBR Chairman Ali Arshad Hakim here on Friday, Salim Vali Mohammad informed the Board that through SRO 212(I)/2013 dated March 14, amendments have been made in the Second Schedule to the Income Tax Ordinance, 2001. Tax under section 148 shall be collected at the rate of one percent in case of manufacturers and three percent in case of commercial importers covered under Notification SRO No 1125(I)/2011 dated December 31, 2011.
Despite assurance given by Finance Minister, FBR issued another discriminatory SRO 212(I)/2013, which entirely negates the recommendations of Tax Reform Co-ordination Group (TRCG) to levy taxes uniformly without any discrimination between industrial and commercial importers to stop fraudulent practices. The SRO shall lead to increased activity of fraudulent elements, who shall import goods, in the disguise of industrial importers depriving national exchequer of revenue and hurting businesses of honest tax paying commercial importers and their customer viz textile and tanning industries in SME sector, he said.
The FBR has provided amnesty to such fraudulent elements under 179(I)/2013 by allowing them to pay just two percent sales tax instead of five percent as leviable under SRO 1125. The members of PCDMA from an essential part of the supply chain of the zero-rated export sectors and thus are major stakeholder. In fact PCDMA members and industrial segments are inter-dependant and if problems are created for one segment, the other is bound to be disturbed. Salim Vali Mohammad added that the FBR should consider proposals and address their concerns to remove hardships of genuine taxpayers.