Plgmea lauds continuation of sales tax exemption on five export sectors

Fawad Ijaz Khan Chairman Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) has welcomed the continuation of Sales Tax exemption on raw material purchases of registered persons of five export sectors. The apprehension of the Leather Garments Industry that their Sales Tax exemptions of registered persons will be removed has been duly addressed by FBR and the exemptions are maintained.
Fawad also appreciated the decision of the government to reduce the Sales Tax Rate to 16 percent from 17 percent and introduce flat rate of 5 percent GST on purchases of unregistered persons of the five export sectors. The reduction of Withholding Tax on cash withdrawal to 0.2 percent instead of 0.3 percent is also a positive measure in the Federal Budget 2011-12. The revenue measure to broaden tax base and issue notices to 700,000 potential taxpayers to bring them into the tax net is also a good step.
Fawad, however, stated that increase in 1 percent VAT on imports of Commercial Importers will increase the cost of Raw materials of exporters since many exporters purchase their raw materials from Commercial Importers. Fawad stated that overall no measure has been taken in the Federal Budget 2011-12 to boost the Exports of the country. He said that the Export Target of $24 billion for the year 2011-12 will be achieved but there are serious doubts on the genuineness of the Exports.-PR