APTMA proposes to make turnover tax zero pc for textile sector

0
157

ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has proposed to make turnover tax zero per cent for the textile sector.

APTMA in its budget proposals 2018-19 suggested that the government, through the Finance Act 2013 had raised the general rate of minimum turnover tax under Section 113 of the Income Tax Ordinance 2001 to 1 per cent from 0.5 per cent, which was further increased to 1.25 per cent through the Finance Act, 2017.

Since taxpayers of the textile sector are incurring losses in the current years however they would be obliged to pay 1.25 per cent tax on their local turnover. Though this minimum tax is adjustable towards normal tax liability in the five subsequent years, but that eventuality is hypothetical and also not available in case the taxpayer has suffered loss.

It is suggested that the turnover tax should be zero per cent for the textile sector as was done in the Budget 2016 for rice mills suffering from global recession.

Moreover, the cost of production, particularly for spinning, weaving and processing industry is high when compared to regional countries. At present, the electricity tariff is Rs11/kWh, which should be reduced to Rs7/kWh. If the surcharge is cross-subsidy and not the theft or inefficiency of the system that it should be withdrawn to make the industry competitive and subsidy amount be allocated in the budget.

In addition to this, the government should announce a uniform price of gas for industries across the country.

The former Prime Minister had announced the export-led growth package on 10 January 2017 for the restoration of the viability of the industry and exports. The government should immediately allocate funds for the payment of duty drawback to claimants against exports to the State Bank of Pakistan for immediate disbursement to claimants.

The proposals further stated that customs duty on import of PSF should be abolished to encourage product and market diversification.

It is suggested that either the standard rate of 30 per cent is brought down to 25 per cent or reduced rates are prescribed sector-wise especially for the textile sector.

Globally, the corporate tax rates have been reduced in the recent years and accordingly in order to align with the best international practice the corporate tax rate be reduced to 25 per cent for tax year 2018 and it is gradually reduced to 20 per cent in subsequent tax years.

The APTMA proposed that government impose 15 per cent regulatory duty on the import of synthetic yarns entering into the domestic commerce of Pakistan.