KCCI Press Release

TURNOVER TAX ON YARN TRADERS

PR No.: PR-/102
Released On: April 12, 2021
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Islamic Date: Shaban 28, 1442 A.H.

Chief Commissioner CRTO assures to analyze possibility of restoring tax back to 0.1pc in next budget

KARACHI: Chief Commissioner Corporate Regional Tax Office (CRTO) Karachi Federal Board of Revenue (FBR) Dr. Aftab Imam, after listening to the viewpoint of business community, assured to analyze the issue of higher turnover tax on yarn traders as compared to the profit margin and look into the possibility of restoring it back to 0.1 percent from 1.5 percent in the next budget.The assurance was given by the Chief Commissioner CRTO at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI) which was attended by President KCCI M. Shariq Vohra, Senior Vice President KCCI Saqib Goodluck, Vice President Shamsul Islam Khan, Former Senior Vice President M. Ibrahim Kasumbi, Chairman Federal Taxation Subcommittee Ibrahim Shamsi, Chairman GST/ SRB Subcommittee Khurram Ajaz Bharara and KCCI Managing Committee Members.The Chief Commissioner CRTO mentioned that FBR was seriously working towards creating ease for the business community as the economy would only flourish when the businesses flourish that would automatically improve the tax revenue for the country. “Hence, we want to facilitate the business community and keeping in view FBR’s approach, most of the issues being faced today would be resolved in the next one-an-a-half year as we are very keen to create a tax-friendly environment”, he added.In response to concerns expressed over multiple audit notices for six years old cases being received by the business community, he said that FBR was well-aware of this issue and it has been observed that most of them were system generated notices hence, the business community should not worry as FBR was trying its best to resolve this issue. “There is no need to re-submit those documents again at the FBR which have already been submitted for audit and only the missing documents should be provided with a covering letter in which it should be clearly mentioned that the following relevant documents have already been provided while the missing documents are being sent”, he added.He further sought business community’s assistance in identifying those millions of individuals who have been doing businesses of up to billions of rupees but they remain out of the tax net which was the basic reason for the exorbitant tax rates being suffered by the existing taxpayers. “The unregistered individuals have to be taken to task which would reduce the burden on existing taxpayers through reduction in tax rates”, he added.Earlier, President KCCI M. Shariq Vohra, while welcoming Chief Commissioner CRTO, appreciated that dedicated efforts and prompt response by Chief Commissioner CRTO towards amicably resolving the FBR-related taxation issues being faced by business community. “We hope that the FBR would incorporate maximum number of recommendations given by KCCI in its budget proposals which have been recommended in the larger interest of the country”, he said, adding that it has always been KCCI approach to highlight the general issues which are not faced by a few individuals only but by the majority of stakeholders from a particular sector. “Our proposals for upcoming Budget for FY 2021-22 carry pivotal importance and will have a positive impact on business and investment climate, ease of doing business and overall growth of the economy.”He was of the opinion that taxpayers face immense hardships in getting petty issues resolved because of the unnecessary hindrances being creates by FBR officials which not only fetches a bad image for the entire department but also discourages new individuals to come into the tax net which was a very issue that requires immediate attention.Shariq Vohra pointed out that many members of the business community have been receiving bulk audit notices nowadays in which huge number of documents for six years old cases of 2014 were being demanded which was not making any sense at all and it appears like an attempt to harass the business community. “The FBR, instead of intensifying the hardships for existing taxpayers, must take practical steps to somehow bring more and more people into the tax net which was in the larger interest of the country as it would not only improve the tax revenue but would also bring down the tax rates that would certainly go in favor of the economy”, he added.Former Senior Vice President KCCI Ibrahim Kasumbi, in his remarks, particularly mentioned that the furniture industry comprising workshops, employing artisans and manual labor, has been receiving notices from tax authorities and field officers in many parts of Pakistan and they were being compelled to get registered as Tier 1 retailers which was unjust and not practicable for this trade. Hence, FBR must stop harassing shopkeepers, showroom and workshop owners in the name of registration in Tier-1 and the employment of hundreds of thousands skilled workers artisans and laborers has to be protected while this important industry of traditional hand-crafted furniture has to be preserved.He further stated that consumption of black tea in Pakistan was 240,000 tons, but the imports through legal channels was hardly 100,000 tons due to high rates of customs duty, sales tax, regulatory duty (RD) and withholding tax (WHT). The remaining requirement was being fulfilled by smuggling, Afghan Transit Trade, and imports under various exemptions/concessions granted to Provincially Administered Tribal Areas (PATA) and Azad Kashmir. Hence, rates of customs duty, sales tax, RD & WHT have to be rationalized to prevent smuggling and massive leakage of revenue, he added.

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