Textile bodies vehemently oppose 17% sales tax

An ordinance, which has imposed a tax of 17 percent of overall sales has been vehemently opposed by the textile industry and value-added textile sector in Pakistan. To add to the woes of the textile industry, the installation of zero for export oriented units has also been removed, along with.
The 17 percent VAT would be imposed on the sale of plant, machinery and equipment and domestic sales of export-oriented products such as textiles and carpets.
However, Mr. Ijaz Kokar, President - Pakistan Readymade Garments Association, who spoke to fibre2fashion, said that "zero-rating the manufacturer cum exporter is still available. The difference is that the manufacturer sells its products locally will pay sales tax on their premises. "
He also reported to say: "If an exporter cum manufacturer is importing raw materials for export purposes there is no change in the system. He is still in the same zero. Only those exporters who also sell on the domestic market, will pay 17 per percent VAT. "
"Our domestic consumers and the economy is not very strong and this tax would be an added bonus and a burden to our people. We have suggested that the Government must begin with VAT only 4 percent and gradually increase.
"The zero percent tax on imported machinery and parts have been withdrawn. Since we are importing the latest technology to remain competitive, we have recommended the government to restore the grade of zero on imports of plant and machinery," he added saying.
Mr. Zubair Motiwala, Chairman - Council of All Pakistan Textile Association (CAPTA) also reiterated the statement by Mr. Ijaz Kokar. He said: "There is no sales tax on textile exports, is for local sales, which was not there before."
"The government has decided to withdraw from zero rating facility in 3-4 sectors, including textiles. This will make the textile industry uncompetitive and therefore requested that the building should be restored."