KARACHI: Shabbir Mansha, acting president FPCCI, has expressed his concern on the glaring anomalies in the federal budget 2022-23. “We have noticed anomalies in customs duties, regulatory duties, income tax and sales tax”, he added.
He noted that turnover tax of 1.25 percent for traders, distributors and dealers is unbearable as profit margins are barely two percent in market sales and the turnover tax will continue to discourage SMEs to be registered in sales tax.
He pointed out 4.5 percent withholding tax on local sale; but, normally trade margins are between 2-3 percent and there is no way a business can absorb 4.5 percent withholding tax and continue to operate viably.
Therefore, sellers find it more viable to buy goods at 20 percent taxes; when accounted for additional duty of three percent on commercial importers on top of 17 percent sales tax and delist from the sales tax.
He maintained that under Section 8 (b) of Sales Tax Act 1990, input tax adjustment in excess of 90 percent of the output tax is not allowed. This condition should be withdrawn as the same has been already extended to the companies operating in various sectors. Furthermore, withholding tax on import of raw materials should be the same for industrial and commercial importers.
He also raised the issue of 12 percent tax under Section 233(1). Additionally, freight and transportation charges under Section 153(1)(b) at three percent should only be applied on final tax region.
Copyright Business Recorder, 2022
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