Chairmen of five export sector associations, including the Value Added Textile Associations, have vehemently opposed the proposal of the Federal Board of Revenue for increase in the sales tax from two percent to five percent.
The chairmen then criticised the government for failing to pay refunds worth Rs 70 billion, saying, "There should be no sales tax on exports. Even the present two percent sales tax should be withdrawn and replaced it with 'No Payment No Refund Regime'. The government has also held up customs rebate claims of Rs 10 billions and Rs 160 billions in DLTL claims," they said, adding that Rs 240 billion was stuck up with the Federal Board of Revenue.
They said the value-added textile exporters were already burdened because of rising tariff of electricity, gas and other essential raw materials. "Despite having the GSP plus status, Pakistan's textile exports have downed by 16.23 percent in March 2015, while overall exports have downed by 13.44 percent. This shows that any increase in rate of sales tax would further lead to decline in the exports of Pakistan," they added.
They said the bureau should spread tax net rather than punish the genuine taxpayers.