The Federation of Pakistan Chamber of Commerce and Industry’s United Business Group(UBG) Sunday demanded immediate removal of all anomalies in the federal budget to provide solace to already hard hit business community in the wake of rising global inflation grappling the region.
Talking to a delegation of business community led by Shahryar Shahid of Nainu’s chain of pizza ,chairman Shahzad Ali Malik Sitara-I-Imtiaz said on Sunday entire business community is worried about the glaring anomalies in the budget regarding customs duties,regulatory duties,income tax and sales tax etc.He said UBG has already proposed that at stage of deregistering from sales tax regime,the condition of prior audit should be withdrawn to facilitate exit after three years provided a company,individual or association of persons (AOP) was filling a null return for the past five years due to discontinuation of their business.
He demanded that there are no disparities in the rates of sales tax on raw materials at the import stage between commercial and industrial importers.He maintained that under section 8(b) of the sales tax act 1990,input tax adjustments in excess of 90pc of the output tax is not allowed.This condition should be withdrawn as the same has been already extended to companies operating in various sectors.
Furthermore,withholding tax on the import of raw materials should be same for industrial and commercial importers,he added.
Shahzad Ali Malik said”A turnover tax of 1.25 pc for traders,distributors,and dealers is unbearable as profit margins are hardly 2pc in markets sales and the turnover tax will continue to discourage SMEs from being registered in sales tax.”
He pointed out that 4.5pc withholding tax on local sales but normally trade margins were between 2-3pc and there was no way a business could absorb a 4.5pc withholding tax and continue to operate without vibration.
Therefore,sellers find it more viable to buy goods at 20pc taxed when accounting for additional duty of 3pc on commercial importers on top of 17pcsales tax and delist from the sales tax system,he concluded.—APP
