ISLAMABAD: The government has hinted at possible restoration of zero-rating regime for the five leading export sectors in the next budget (2021-22).
Sources told Business Recorder here on Wednesday that the issue of zero-rating regime was discussed during the last meeting of businessmen and exporters from Sialkot with Hammad Azhar, Minister of Industries and Production, and officials of the Federal Board of Revenue (FBR) at the Ministry of Industries and Production.
According to the sources, the meeting was held in the light of the “Record Notes” of the last visit of Prime Minister Imran Khan to Sialkot.
The main issue raised by the exporters of Sialkot was the introduction of the Fixed Tax scheme for the industrial sector of Sialkot in consultation with the stakeholders.
The Sialkot-based exporters have also raised the issue of proposals for taking concrete steps for the promotion of business and exports.
Most of the industries in Sialkot are export-oriented sectors including surgical and sports goods.
During the meeting, the proposal of Fixed Tax scheme was discussed.
The representatives of the FBR informed that all fixed tax schemes have been abolished as a policy measure.
The fixation of any tax regime for any specific area except industrial zone has consequences.
Sources said that the senior officials of the Ministry of Industries and Production have informed the exporters that the government would consider possible restoration of the zero-rating regime during the budget preparation exercise for the next fiscal year.
The ministry would convey the concerns of the exporters to the Ministry of Finance as well as the FBR.
Private sector claimed that it is high time to review SRO 1125 in its true spirit and reintroduce the system of no payment no refund of sales tax for the five export-oriented sectors for one year to sustain the industry which is already facing crucial liquidity crunch due to Covid-19.
The imposition of 17 percent sales tax had brought a disastrous impact on the textile industry and its exports as well as it caused liquidity crunch due to stuck refunds worth billions of rupees, and under the prevailing circumstances the government should review and restore zero-rated regime for the five major export sectors as a lifeline for the economy.
Copyright Business Recorder, 2021
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