Federal Board of Revenue decision of increasing withholding tax on import of all textile raw materials and machinery from one per cent to five per cent through SRO140(I) 2013 would unnecessarily burden the textile exporters with Rs10 billion of refund claims, while billions of rupees in refunds were already pending with FBR for a long time.

All Pakistan Textile Mills Association Chairman Ahsan Bashir said that income tax on all exports was one per cent that the textile exporters pay at the time of export of consignment at the customs terminal. He said the textile industry annually imported cotton worth $1 billion and man-made fibres worth $1 billion, which were basic raw materials for the industry that exported 80 per cent of the textiles it produces.The APTMA leadership also criticised the Federal Board of Revenue (FBR) for notifying controversial SRO140, irking the industry at large.

They lamented that the FBR made no consultation before notifying the controversial SRO and raised the question that what kind of message the FBR is conveying to the world by introducing such harsh taxes. Group leader Gohar Ejaz said that it simply means that the textile industry should not import raw materials convert into value added products anymore, he added. He termed it an extreme step and expressed the hope that the FBR would be convinced with the APTMA stance once come across to discuss the issue.

Gohar Ejaz said the industry has strong concerns on Sales Tax collection mechanism, refund procedure and increase in the Income Tax rate. Chairman APTMA Punjab Shahzad Ali Khan said $2 billion converted into local currency came to be Rs200 billion and the after increase in withholding tax they would have to pay Rs10 billion tax to the authorities at the import level. He questioned the wisdom of collecting this tax from the industry when the FBR would eventually be refunding the amount. He said the hassle the industry faced in refunds was well-known to all.

Still billions of rupees in refunds dating back to several years were pending with the FBR, he added.APTMA leadership also extended full support to the Iran-Pakistan gas pipeline project, saying that it would provide uninterrupted gas supply to industry on affordable price. They congratulated President Asif Zardari and his team for taking bold step on IP gas pipeline.

They appreciated the move and hoped that the gas shortage of one billion cubic feet would be met through this project. According to them, the financial side of the project has been finalised by the authorities concerned and the gas supply would start through this pipeline by March 2015. They said Pakistan would be saving $2.4 billion fuel saving annually once gas supply from Iran starts. Group leader APTMA Gohar Ejaz said the industry fully backs the project and all members of APTMA will reach to the zero point on Iran Pakistan borderline to mark the ground breaking ceremony on 11th March.