RECORDER REPORT

LAHORE: The Pakistan Industrial and Traders Association Front (PIAF) has reiterated its demand to cut down the sales tax rate to single digit to take burden off the consumers, besides reducing cost of production for the industry.

PIAF Chairman Irfan Iqbal Sheikh in a statement on Wednesday said there should be low rate of sales tax while tax net should be broadening to achieve growth rate target. The prevailing rate of sales tax at 17 present in Pakistan is too high as compared to other countries in the region, he said.

“The high rate is the root cause of tax evasion, corruption, thin tax base and smuggling. Increase in tax rate or higher tax ratio always discourages tax payers and also for new comer who want to get registered in the taxation system and on the other hand decrease in the tax ratio or lower tax rate always encourages tax payers and even for new entrants who want to be included in the tax net,” he added.

He said the inconsistent and uncertainty among export trade and its supply chain induced corruption and hurt exports as could be witnessed from the fact that the exports were shrinking or stagnant for the last three years and it was apprehended that Pakistan would not be able to double textile exports from existing US $13 billion to $26 billion per annum as envisaged in the new textile policy 2014-19.

Sheikh suggested that all the plant, machinery and capital goods, not manufactured locally, should be allowed to import at zero rated customs duty, as it will be ultimately used as a raw material for the industry.

He also demanded the government to bring agri income into tax net and federal government should persuade all the provinces to impose and collect this tax, which has been imposed for the long time but not being implemented in its true spirit.