FAISALABAD: Pakistan will have to totally depend on its exports immediately after the Corona crisis and for this purpose, the government must incentivize the export sector by reintroducing SRO-1125 (zero rated regime for five major export sectors).
Addressing a “zoom conference”, Rana Sikandar Azam, President Faisalabad Chamber of Commerce & Industry (FCCI) said that the industrialists had to make a protracted struggle to convince the government to introduce SRO-1122. “This clause had exempted five major export sectors from payment of 17 percent refundable sales tax”, he said and added that while withdrawing this SRO, the government had assured that their refund would be paid back to them within 72 hours. “But now its period has exceeded five months”, he pointed out and said that due to regular payment of sales tax, exporters are facing a liquidity crunch as their hundred percent capital has gone to the government in the refund regime.
He said that the government is using this money without paying any markup to the exporters while they have to get costlier loans with high interest rates from the open market to make their day-to-day payments.
He expressed concern that the government has received Rs.300 billion sales tax from exporters but refunded only Rs.100 billion. “But it gives an impression that the government was doling out a favor to the exporters whereas it is the money which they have already paid in the form of refundable sale tax”, he added.
He further clarified that as taxes could not be exported. “Hence government should not indulge in the practice of first collecting and then making refund of this tax amount”, he said and added it is just a futile effort while the government may spend its precious time in expanding the tax net.
He further said that in this connection, the government alleges that some exporters are making their supplies to the domestic markets and in this garb of exports, they want tax free income.
Rana Sikandar Azam said that there is no justification to collect taxes from all because of few black sheep.
He said that the Federal Board of Revenue (FBR) has unlimited powers to deal with such elements and hence it should focus on these tax evaders instead of shoving the entire sector with the same stick.
He opined that in the coming days the government must have to provide more incentives to the exporters so that they could enhance their exports and earn precious foreign exchange for the country.
He further told that the government has not yet passed out full benefits of low prices of oil and gas and due to high cost of production, our exporters have to face tough competition from the rival exporting countries.
He said that the government should pass on the benefits of low prices of gas and electricity in addition to introducing a zero-rated regime for the five major export sectors.
He pointed out that after repatriation of overseas pakistani workers, the foreign remittances will reduce to minimum and in this scenario we have to totally depend on our exports in order to bridge the import-export gap. “Hence we must support exporters so that they could enhance our export as early as possible”, he suggested.