The Pakistan Industrial and Traders Association Front (PIAF) has reasserted its demand to bring down the sales tax rate to single digit to relieve the consumers, in addition to reducing cost of production for the industry.
PIAF chairman Irfan Iqbal Sheik emphasised on broadening the tax net while keeping the tax rates low. In a joint statement along with PIAF senior vice chairman Tanveer Sufi and vice chairman Shahzeb Akram, he observed that the prevailing 17pc sales tax rate in Pakistan stands very high in comparison to other regional countries. He blamed high tax rates for being the root cause of tax evasion, corruption, thin tax base and smuggling.
He highlighted that higher tax ratios discouraged taxpayers and averted newcomers who were considering registering with the taxation system.
He appreciated the ruling party’s vision for approving zero rated tax regime to five export-oriented sectors, in addition to the announcement of the incentive package worth Rs180b to boost exports. He hoped that the package would be implemented soon.
He further stated that inconsistent and uncertainty surrounding the export sector trade and its supply chain paved way for corruption and proved detrimental to exports. This is visible from the dwindling exports that have not shown growth for the last 3 years, he regretted. Furthermore, it is feared that the country will not be able to meet its annual textile exports targets that are expected to double to $26b from the existing $13b as envisioned in the policy 2014-19, he stated.
