The value-added textile industry of Pakistan has opposed the imposition of two percent sales tax at each stage of the textile sector and five percent withholding tax.
Last month, Pakistan’s Federal Board of Revenue (FBR) announced imposition of two percent sales tax on all stages of the textile sector and on import of plant and machinery. Moreover, the import of raw material and plant and machinery has been subjected to a five percent withholding tax.
Speaking during a joint press conference, Chairman Value-added Textile Associations and Patron in-Chief of Pakistan Hosiery Manufacturers Association Jaweed Bilwani said the value-added textile export industry, which contributes around half of the country’s overall exports, was exempted from sales tax after thorough analysis and due consideration based on a statistical analysis of the effect that the move would have on revenue leakage and collection, and to cut corruption in tax management.
However, FBR did not even bother to take the real stakeholders of the textile industry – the value-added textile export sector – into confidence before announcing the new levy. No textile associations including apparel and clothing (readymade garments), knitwear and hosiery, bedwear, towel and denim were consulted, Mr. Bilwani said.
