FAISALABAD: Sheikh Farooq Yusuf acting President Faisalabad Chamber of Commerce & Industry (FCCI) has welcomed the suspension of major condition of the SRO 1125(I) 2011 which has made levy of “further tax” applicable on goods supplied to persons having no sales tax registration.
Commenting over the present Taxation Policy, he said that after continuous declining trend in exports, the five major export sectors were declared zero rated in order to lessen burden of tax on exports. He said that it was surprising that against the good intention of government, the FBR inserted a new condition under SRO 1125 to levy further tax. He said that this condition proved detrimental as the cost of doing business was not controlled nor the volume of export was increased.
He said that no doubt the zero-rating was a positive decision as we could not exports taxes. Moreover the heavy burden of taxes had created unmanaged liquidity problems for the exporters. Their huge refundable claims were stuck up and they had to borrow fresh loans from the banks and other financial institutions at high markup rate to meet their day to day financial needs. “On the other hand, their own money was lying with the FBR unutilized”, he said and added that the condition to levy further tax was also imposed without any lawful authority.
Continuing Sheikh Farooq said that the business community and particularly the exporters were demanding to cut down the production cost as our exports were losing their inherit edge of in the international market.
He said that the business community had welcomed the government decision to declare 5 important export sectors zero rated but at the same time the condition to levy further tax was imposed which had actually nullified the benefits of zero rating.
He welcomed the suspension of this condition of SRO and urged upon the government to accept the decision of Lahore High Court without filling any appeal against it. He said that this decision will certainly cut down the production cost and create niche for our exportable surplus in international markets.