KARACHI: Patron-in-Chief of Korangi Association of Trade and Industry (KATI) SM Muneer and President Salman Aslam have demanded the withdrawal of a 10 percent supertax on 13 sectors by the government.
SM Muneer, Patron-in-Chief of KATI, said that with this move of the government, economic activities are declining with each passing day and with the implementation of the supertax, the economic slowdown is expected to increase further. He said that on the condition of collecting an additional tax of Rs 400 billion from the IMF, a super-tax of 10 percent was imposed on 13 different industrial sectors, including textiles, in addition to the pre-imposed tax.
SM Muneer said that a significant portion of the country’s exports come from the textile sector, which is already facing problems such as gas cut-off, expensive RLNG, expensive electricity, high-interest rates, and high production costs. In such a scenario, further taxes on other sectors, including the textile industry, are unbearable. He said that the overall rate of tax collection in these 13 sectors would increase from 29 to 39 percent which is impossible for any business to bear.
Patron-in-Chief of KATI said that the textile industry in Faisalabad was closing down rapidly which was a matter of concern. He demanded immediate withdrawal of super tax from the government so that the industrial cycle continues to run and the economy does not slow down.
KATI President Salman Aslam said that the implementation of the super tax has caused great frustration to investors. The government’s steps to hike in petrol, electricity, and gas prices by 30 to 40 percent; and interest rates to 15 percent are adding difficulties in the industry. He said that the ongoing investment process in the country is also in jeopardy and investors have started thinking that in the current situation, further investment is not without risk.
He said no significant tax has been levied on the agricultural sector. If the government has to raise more money to meet the IMF’s requirements, the best way to do so is to eliminate tax breaks for various sectors in the budget and reduce non-development expenditure.
President KATI said that the imposition of the super tax would also lead to the deterioration of financial discipline in the country and would provide a new opportunity for tax collectors to unnecessarily harass businesses and confuse them with legal complications.
Salman Aslam said that instead of further enhancing their capacity, big industries are being entangled in a cycle that will slow down the industrial process as well as increasing unemployment and inflation in the country. Therefore, the government should focus on other measures to collect additional tax revenue instead of imposing the supertax.
Copyright Business Recorder, 2022
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