Unnecessary Taxes Killing Businesses

Extra burden of unnecessary taxes is killing small businesses

It was made clear from the beginning of this government that they are not sympathetic to business community or to general public. They proved it taking the first step by implementing several unnecessary and unjustifiable taxes. The taxes which were removed by previous governments have been forced again upon the business community and poor people of Pakistan. Large business may somehow manage to get themselves out of the mess, putting the entire burden of inflation upon general public, increasing the price of their products and services. Hence there is no relief for common man. The increase of Sales Tax from 16% to 17%, the extensive and illogical Property Tax, and finally the further changes and implementation of SRO-505 has spilled oil on the fire, putting the export industry to the verge of distinction.

SRO Number: 505(I)/2013
SRO Date: June 12, 2013
SRO Relates To: Sales Tax
SRO Description: To expand scope of withholding regime by making all withholding agents responsible to withhold whole of sales tax on purchases from unregistered persons.

In order to get more and more people into tax circle, the government has forced tax on those not registered with FBR as Sales Tax Payers. The Sialkot industry is home industry, there are many small size production units, even manufacturing in their homes, women and even disabled people are playing huge part in this production chain. Many other cities of Pakistan also have this kind of pattern. These small businesses do not even qualify to be registered as sales tax payers. The new sales tax policy not only effects the large export houses but also effect the small business and home industry, as their payments from export houses have been disturbed.

A series of meetings have already been held with Federal Minister for Finance Mr. Muhammad Ishaq Dar, Chairman FBR and Chief Commissioner, Regional Tax Office Sialkot. However, there has been no response due to which a Joint Meeting of Trade Bodies of Sialkot and Tax Bar Association was held yesterday September 11, 2013 to thrash out this important issue and to discuss line of action for getting relief for the export industry of Sialkot. Indeed, implementation of SRO-505 would have devastating effect on the export sector making the exporters with holding agents whereas it is exclusive duty of the Government to collect taxes as it has all the necessary resources manpower and legal power to accomplish this task.

It is totally illogical and highly unjust to pass this responsibility to the exporters having already been squeezed to the limit due to National issues and International Market problems. It was resolved in the meeting to give strong message to the Government to reverse the decision without further delay otherwise industry would close down. Accordingly, press release was issued, which appeared today in various National News Papers to highlight our point of view requesting the Prime Minister and Minister for Finance for urgent corrective measures. Press release issued in Daily Business Recorder is attached.

Businesses in Pakistan are already going through tough time from last decade, especially from last couple of years, things have been more difficult. Political disturbance along with energy crisis was quite enough, but now this taxation Tsunami is nothing less than a disaster.

Hope that Government will look into the matter most sympathetically to provide relief to the export industry of Sialkot by taking positive action soon.

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Category: Business