UNISAME voices against discrimination with rice exporters

Karachi: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of federal finance minister Dr. Abdul Hafeez Shaikh to the discrimination with rice exports and rice exporters by other exporters and pleaded to be treated like other exporters of commodities. President UNISAME Zulfikar Thaver said SME rice exporters are complaining that clause 45 of Part-IV of second schedule has exempted exports from withholding taxes under section 153(1) of the Income Tax Ordinance 2001 and SRO 368(I)/94 dated 7-5-1994 too exempted exporters of goods from withholding taxes and that taxes are not to be deducted from purchases when the same are to be exported outside Pakistan. He said they are aggrieved that exemption from withholding taxes is meant for all of goods exported outside Pakistan but this general exemption does not include rice in respect of which special rates of tax deduction have been specified. He said this kind of enactment has created a disparity among exporters and discriminates between exporters, as all exporters other than those dealing in rice, cotton seed and edible oils are exempted from withholding taxes. He emphasized that this disparity among exporters in withholding taxes is not justified nor reasonable and needs to be resolved and urged the federal minister to remove the burden of withholding tax on rice exports and exporters to enable them enhance exports. The rice exporters alternatively suggested that if the ministry is bent upon collecting withholding tax from the rice exporters for revenue targets than the withholding tax on exporters may continue to be imposed but the withholding tax deduction on purchases for rice exports be withdrawn as this is creating a setback as the suppliers are not agreeing to the deduction of withholding tax from their invoices and are point blank refusing deduction, as a result the rice exporters have to pay from their own pocket resulting in double taxation one on the purchases and secondly on the export sales invoices deducted by the banks. The union also pointed out that the Federal Board of Revenue (FBR) is not abiding by the SME definition in the SME policy framed and accepted by the legislatures in which it is defined that an entrepreneur having a turnover of less than 300 million is an SME and the FBR has exempted only entrepreneurs from withholding tax collection having turnover of less than 50 million and this is a serious shift from the SME policy and needs to be re-examined in the light of the SME policy and uniform definition of SME adopted by the cabinet.