APTMA urges govt to do away with ‘regressive’ taxation policies

ISLAMABAD: All Pakistan Textile Mills Association (APTMA) has urged the government to do away with regressive taxation policies as these are causing permanent closure of factories and massive unemployment.

Chairman APTMA Asif Inam, in a statement, said that textile sector is gravely concerned over the impact of SRO350 (I)/2024 and recent withdrawal of the sales tax exemption on local supplies for export manufacturing on the textile sector. These regressive moves are crippling the industry with devastating consequences for employment, external sector stability and the overall economy.

Commenting on SRO 350(1) 2024, APTMA stated that despite repeated pleas from industrial stakeholders, clear commitments from the Finance Minister that SRO 350(I)/2024 will be amended, and categorical instructions from the Prime Minister to suspend the SRO till it is made workable for all stakeholders involved, the FBR continues to enforce the dysfunctional policy to the detriment of all manufacturers in Pakistan.

Finance bill imposes additional financial burden on textile units: APTMA

The textile sector, a vital pillar of Pakistan’s economy, is being severely undermined by the current provisions of SRO 350, leading to widespread disruptions across the sector.

APTMA maintains that SRO 50’s operational challenges have exacerbated the difficulties already faced by the industry, adding that due to the requirement of linking the entire supply chain to filing sales tax returns, several APTMA members and other firms across the country are unable to file their returns within stipulated deadlines since their upstream suppliers have not filed their returns and the FBR has also eliminated the option of delinking of invoices from the return.

The Association further explained that input claims of the buyer are restricted to the payment of tax liability of the seller by the last day of the month in which the due date falls despite payment of the entire amount of supplies (inclusive of sales tax) to the seller, buyers are unable to claim input tax for the only reason that the seller has not timely paid his due tax.

Hence, the buyer is suffering for an act he is not responsible for and is unable to file the return without payment of additional tax which is not otherwise his liability.

The operation of this Rule has cascading effects, i.e., when a buyer is unable to file his return because of the above stated situation, his customers are also unable to claim input of sales tax invoices issued by them, and these customers cannot file their sales tax returns either. This situation leads to undue and hefty tax demands and penalties, despite all involved parties having deposited their due sales taxes.

Copyright Business Recorder, 2024