KARACHI: The value-added textile exporters on Monday dismissed the proposed “imposition” of Final Tax and Normal Tax Regimes in the federal budget 2024-25, terming it “counterproductive”.

Members of the Value-Added Textile Exporters Forum told a news conference at PHMA House that the move will create “unnecessary hassle” with involvement of FBR officials, which may open gates for corruption.

Presently, the 1 percent tax deduction under FTR is electronically, without human intervention, Muhammad Jawed Bilwani, Chief Coordinator, Value-Added Textile Associations Forum told the media.

High taxation cannibalizing juices export potential

“As against the existing final income tax on exporters, it has been proposed that from the next fiscal year, the 1 percent rate should be treated as minimum and the exporters will have to submit documents to justify their income and expenditures,” he said.

Presently, he said, under FTR, Income Tax is directly deducted at source, electronically, when remittances are received on 100 percent sales proceeds irrespective of profit or loss. “It is a daylight fact that corruption is rampant in FBR and recent ‘speed-money case’ in LTU Lahore has unearthed it with evidence where the FBR officials have openly expressed their animosity with each other to get their illicit shares,” he said.

Jawed Bilwani and other exporters urged the government to refrain from adventuring with export sector and continue the Final Tax Regime for Exporters as usual without change.

He said that textile exporters are further expecting from the government to revise downward the 1 percent income to 0.5 percent. He added that the Exporters file their Sales Tax Refunds electronically through FASTER system, which are also processed electronically without human intervention and their claims are also disbursed electronically.

Exporters articulated that proposed changes in tax regime for exporters will be counter-productive. “It will result in drastic reduction in Pakistan’s export revenue leading to a reduction in Pakistan’s foreign exchange earnings,” they warned.

They said that the local exporters are likely to lose export opportunities to other countries like India, Bangladesh, Cambodia and Vietnam for lack of competitiveness faced by Pakistani industry.

They said that the Finance Minister, Chairman FBR and Commerce Minister have not consulted with the Textile Export Associations for Federal Budget 2024-2025.

Some 14 Tax Reform Commissions were formed for restructuring and reforms, but all failed, they added.

The export industries are already faced with huge set of challenges as they are paying multiple taxes ranging from the Federal Government, Provincial and Local Government, Export Development Surcharge, SESSI, EOBI, etc.

They urged the government to bring back policy discount rates to a single digit and EFS rates to previous levels, besides allowing exporters with back-to-back LC on a Bangladesh model.

Those participated in the event including Abdul Jabbar Gajiani, Chairman PHMA (SZ), Sheikh Shafiq, Chief Coordinator PRGMEA, Abdul Samad, Ex-Chairman PCMA, Khawaja Usman, Chairman PCFA, Junaid Ur Rehman, Chairman Export Committee KCCI, Shoaib Majeed, PDMEA and representatives from TMA, PAKSEA & APTPMA and prominent textile exporters, Babar Khan, Riaz Ahmed, Junaid Makda, Abdul Qadir Bilwani, Faisal Arshad Sheikh, Khizer Mehboob, Ilyas Gigi and Abdul Rehman.

The forum is comprising of all Value-Added Textile Associations: Pakistan Hosiery Manufactures & Exporters Association (PHMA), Pakistan Readymade Garment Manufacturers & Exporters Association (PRGMEA), Towel Manufacturers Association of Pakistan (TMA), Pakistan Cloth Merchants’ Association (PCFA), Pakistan Denim Manufacturers & Exporters Association (PDMEA), Pakistan Knitwear & Sweaters Exporters Association (PAKSEA), Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association (PCFA) & Pakistan Bedwear Exporters Association (PBEA).

Copyright Business Recorder, 2024

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Usman Jun 11, 2024 08:18am
Tax them and make sure the invoices amount reached pakistan.no more under invoicing.Traders having accounts in Dubai should prove there wealth as they all do under invoicing and taxpayers pay them
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The commons Jun 12, 2024 03:33pm
these exporters have shown their true colours during the recent dollar debacle . Nearly all parked their dollars abroad hoping to cash in on his upward trend on the dollar, causing billions of loss
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