Exporters, telecom, dairy industries seek tax cuts, super tax abolition in budget proposals

Textile exporters, telecom operators, dairy producers, and pharmaceutical manufacturers have urged the government to reduce taxes and rationalise duties in the upcoming federal budget, including the abolition of super tax and cuts in withholding tax rates.

According to a news report, the proposals were presented during a meeting of the Senate Standing Committee on Finance and Revenue, chaired by Senator Saleem Mandviwalla at Parliament House.

All Pakistan Textile Mills Association recommended the abolition of the super tax and the rationalisation of withholding taxes imposed on exporters.

The Towel Manufacturers Association of Pakistan proposed restoration of zero-rating status, revision of withholding tax rates for small and medium enterprises and rationalisation of duties and taxes.

Telecom Operators Association presented a detailed set of proposals and asked the government to abolish customs duty on import of 5G equipment, stating that the move had earlier been committed during approval of the latest spectrum auction.

The telecom sector also demanded a reduction in withholding tax under Section 153 of the Income Tax Ordinance, 2001, from 6% to 4%, along with the extension of the turnover tax carry-forward period under Section 113 from two years to five years.

Operators further sought a reduction in advance withholding tax from 15% to 8% and proposed lowering overall duties and taxes on optic fibre cable imports from 67% to 5%.

The association also requested withdrawal of commissioner’s authority to reject advance tax estimates filed by taxpayers under Section 147 of Income Tax Ordinance, 2001.

Pakistan Dairy Association proposed reducing general sales tax on dairy products from 18% to 10% in the next budget.

The association stated that the loose milk market was valued at around ₨7.9 trillion, while the formal dairy sector accounted for around ₨331 billion with annual tax contributions of ₨53 billion.

Fruit Juice Council informed the committee that sales had declined by around 50% and recommended reducing Federal Excise Duty from 20% to 10%.

The council also urged the government not to classify fruit juices together with carbonated beverages for taxation purposes.

Pakistan Poultry Association called for rationalisation of sales tax policies and proposed incentives aimed at increasing women’s participation in the formal workforce through salary-related facilitation measures.

Pakistan Pharmaceutical Manufacturers Association proposed increasing the foreign exchange retention rate to 35%, introducing performance-based incentives and reviewing imposed sales taxes and hidden taxation.

Representatives of the pharmaceutical sector told the committee that implementation of the proposed measures could significantly increase industrial activity and improve revenue generation.