The Zonal Chairman, Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA), Mr. Shaikh Mohammad Shafiq has strongly criticized the FBR on extending the Sales Tax Withholding Regime through its notification SRO 98(1)72013, dated 14-02-2013 according to which all companies including exporters will be subjected to Withholding Tax at one-fifth (l/5th) of the applicable rate of sales tax on all purchases.
Mr. Shafiq said that this move is purely a revenue generation measure meant to bolster the numbers of incompetent FBR. This measure will further fuel inflation in the country and the direct burden would be on domestic consumers and international buyers of Pakistan textile and garment industry. Through this measure raw material will become more expensive for companies which would mean higher prices for consumers which are already suffering heavily due to run-away inflation.
This also means that Pakistani value added garments will be become more expensive and would no longer be able to compete with our competitors like India, Bangladesh and Vietnam. He said that we are already facing multiple problems such as strikes, law and order situation and foreign buyers have stopped coming to Pakistan, this additional burden would mean that we will have no other choice but to close down our businesses and move our capital abroad.
Mr. Shafiq requested an urgent SOS to FPCCI and other associations in the value-added sector in order to force the government to roll back this anti-business measure.