The Multan Chamber of Commerce and Industry (MCCI) Tuesday flayed the issuance of SRO 448 (1) 2011 whereby the government has withdrawn sales tax exemption on import of machinery. It was a discouraging step against investors who wanted to adopt modern technology in textile, tannery and other sectors to meet the demand of international market.
MCCI president Shahid Naseem Khokhar demanded of the government to withdraw the SRO in the larger interests of the economy of the country. He said the withdrawal of exemption was a blow to already crawling industrial sector. It will not only jack up the project cost by 16 percent while the financing requirements for existing projects would also go up.
He said the withdrawal of the exemption would open the door for under invoicing and smuggling, as the step would result in failure of industry to upgrade its technology, as industry would find it difficult to import modern technology. If this withdrawal of exemption is absolutely necessary it should only be withdrawn from commercial importers and not the industrial units. The government had notified the withdrawal of exemption on May 21, 2011 through an SRO 448(I) 2011 by amending the SRO 557(I)/2006 dated June 5, 2006.The recent decision of Pakistan's Federal Board of Revenue (FBR) to withdraw import duty exemption on plant and machinery has been severely condemned by Textile millers, tanners and other investors and industrialists.
Terming the decision to be anti-industry and anti-nation, Shahid Naseem Khokhar said that such a move would cripple country's economy and would eventually bring the country's industrialisation to a standstill. At this point the government should provide increasing number of incentives to the industry to facilitate economic revival and generation of newer job opportunities in the country.
Instead, under pressure from the IMF and the World Bank, the government is trying to strangle trade and industry. Shahid Naseem Khokhar demands immediate withdrawal of the decision and seeks duty-free clearance of all the machinery consignments lying at the port. He urged the Federal Board of Revenue to look into the matter and issue necessary directives for withdrawal of SRO.