Cut in withholding tax rate on polyester yarn import hailed

The Pakistan yarn Merchants Association (Pyma) has hailed the cut in withholding tax from six percent to two percent on the import of polyester yarn of all types.
Pyma Chairman Khurshid Ahmed Shaikh, in a message, has thanked the Central Board of Revenue (CBR) Chairman for issuing SRO 769 amending the Second Schedule of Income Tax Ordinance (ITO) to rectify the anomaly on income tax side as demanded by the Pyma.
He said that the marginal cut in the tax rate would have a great impact and would help the exporters of the blended textiles to compete better in the international market where price margins were fast dwindling.
Shaikh recalled that the major problem faced by the yarn merchants was 15 percent protective tariff on the import of raw material (PTA) provided to the ICI under a sovereign guarantee up to 2008.
Reduction of withholding tax on polyester yarn at import stage would be an interim relief, he said, adding this would reduce the high upfront cost of raw material for small weavers, who could not import directly due to financial constraints and hence rely on commercial importers to meet their requirements.