Garments industry is to stop audit notices

Lahore: Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has asked the Federal Board of Revenue (FBR) to help strengthen the industry and exporters by timely releasing sales tax refunds, instead of sending them audit notices.

In its statement, the association highlighted that the government collects more than 51% of tax revenue from the manufacturing sector, despite the fact that it constitutes only 13% of the gross domestic product (GDP).

On the other hand, it said, the agricultural sector, which constituted more than 26% of GDP, was not fulfilling its national obligation and was paying just 2% of income tax.

PRGMEA Central Chairman Mubashar Naseer Butt underscored the need for widening the tax base and bringing the agricultural sector to the tax net.

He said that tax collectors were sending audit notices to exporters, despite their obligation to expedite tax refunds, and that rather than facilitating the industry, the FBR was causing problems for manufacturers and exporters.

“On average, 10 audit notices are being served on almost every exporter, who is fed up with the long delay in refunds.”

“It’s the question of survival in the backdrop of an acute liquidity crunch and we need the government’s help to save the industry from bankruptcy,” appealed PRGMEA Vice Chairman Waseem Akhtar.

He called for ensuring ease of doing business, lowering cost of production, providing a solution to the liquidity crunch through early refund payments, drawing up a long-term and consistent energy tariff policy and relaxing the import policy for industrial raw material.

Airing concern over the withdrawal of competitive power tariff of Rs19.90 per unit, Akhtar pointed out that it led to a further decline in textile and overall national exports, which was ‘alarming’ and ‘unfortunate’.

Published in The Logical Baat, March 31st, 2023.

Leave a Reply

Your email address will not be published. Required fields are marked *