The Federal Board of Revenue (FBR) is in process of evolving strict laws to avert investments in real estate sector, a top FBR official said here on Thursday. Speaking at a meeting with the representatives of Pakistan Hosiery Manufacturers and Exporters Association (PHMA) at PHMA House, Rehmatullah Wazir, Member Inland Revenue (Policy), the FBR said that the board had noticed heavy investments in unproductive sector - real estate.
Following the said reason, it has been decided to evolve strict laws and impose taxes on real estate sector to divert investments to productive sectors, he said. He assured the representatives of the PHMA and releasing their Rs 111 billion tax refunds on priority basis, saying that under the directives of Finance Minister Ishaq Dar, all pending refunds up to Rs 5 million would completely be released by the end of the current month while the rest of the refunds would also be given on priority basis. He said that the FBR was presently doing budget exercise and his visit to the PHMA was aimed at getting feedback from business community for the upcoming budget.
He endorsed the PHMA proposal regarding Export Development Fund (EDF), saying that the collection of the EDF should be subjected to its utilisation with the aim to facilitate the industry at maximum. Earlier, Abdur Rasheed Fodderwala, Chairman PHMA South Zone, said that the government's unfriendly policies for export-oriented sector had led 14 percent decline in the country's exports. Moreover, he said that around Rs 343 billion tax refunds had been stuck that caused wiping out small exporters. He said that value added sector, which generated employment up to 25 million, was being neglected and added that the sector should be taken on board in policy making process.
Jawed Bilwani, chief co-ordinator PHMA, said that zero-rating facility, which was going to be resumed from July, should immediately be restored. He said that although the decision to discontinue zero-rating facility was aimed at generating revenue to Rs 10 billion, it had declined the country's exports by 14 per cent.
He said that the production of cotton bale, which stood at 14 million, had now declined to 9.65 million. Bilwani further said that exporters should also be exempted from Withholding Tax (WHT) as they adjusted the same in Workers Welfare Fund (WWF) or claimed it as refunds. He said that the FBR had declared value added sector as manufacturing sector but the Sindh Revenue Board (SRB) instead of doing the same was treating them under service sector. Keeping this in view, he urged the member IR to look into the matter and take up the issue with provincial revenue authority.
Moreover, he demanded that the FBR officials, who were involved in creating unnecessary hurdles for exporters, be penalised. He requested the member IR to withdraw bond paper condition for the import of accessories, saying that this was problem-prone condition, which needed to be withdrawn to provide maximum relief to the value added sector.