While putting its weight behind Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) call for withdrawal of 2 per cent sales tax on export-oriented industry, the Lahore Chamber of Commerce and Industry Wednesday urged the Federal Board of Revenue to stop taking such anti-business measures that are detrimental to much-needed industrial growth.

In a statement issued here, LCCI President Farooq Iftikhar said that as per international law and under WTO regime no export sector can be taxed. “Since the whole industry has already rejected the SRO 154, therefore the FBR has no justification to remain stick to this anti-business proposition.” It is unethical the FBR is playing arm-twisting with those who are generating revenue for the government and thus pushing them to wall, the LCCI President said.

He said that almost seven year ago in 2005, the FBR declared textile, leather, surgical goods, sports goods and carpets as zero-rated sector to encourage exports and ensure relief to exporters from cumbersome refund process but the SRO 154(I) 2013 has pushed them again into the refund regime.

The LCCI President said that the FBR thrice introduced refund system by withdrawing zero-rated status of export-oriented industry but failed because it ended up in resource drain. He said that there are reports that a number of businesses could not get their refunds due in 2003/4.

“It would have been wiser on the part of the FBR if it had improved refund system before introducing the much controversial SRO 154.”The LCCI President said that many businesses had fallen prey to liquidity crunch and could not continue their operations because of multiple internal and external pressures.

He suggested that status of zero rating be maintained through withdrawal of SRO 154 and the FBR should strive to ensure growth in the industry so that more revenue could be generated.Export is the most well documented sector of the economy and hence its growth would mean more revenue for the government.