Amended Sales Tax laws hitting local industry: PEW
Promoting imports at the cost of local industry assailed
The Pakistan Economy Watch (PEW) changed sales tax laws have reduced the price of imported raw material as compared to the raw material produced in the country which has put the future of hundreds of industrial units at stake.
The development is resulting in wastage of foreign exchange, it will reduce revenue and increase unemployment, it said.
The companies producing raw material for the textile industry that includes yarn, grey cloth, and cotton, etc. are under the threat of closure and bank defaults, therefore, the laws should be reviewed, said Dr. Murtaza Mughal, President PEW.
He said that the textile industry is preferring import of raw material after the withdrawal of the facility of zero-rating which has reduced demand for manufacturing material threatening a large industrial segment.
Dr. Murtaza Mughal said that no duties are imposed on the import of raw material while there is seventeen percent sales tax on local units producing the raw material. These units have to wair for nine months to get refunds which add to their cost of doing business.
He said that some elements are also getting the benefit of the current policy and they are importing finished products in the garb of raw material which should be discouraged.
Foreign manufacturers should not be given preference over the local manufacturers as it has started to hit demand for raw material including cotton which will hit troubled growers, he demanded.
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