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PTA concerned over FBR’s proposal to enhance WHT rates


Pakistan Tanners Association (PTA) has expressed its concern over the Federal Board of Revenue’s proposal, submitted to the Ministry of Finance, to enhance withholding tax (WHT) rates. While talking to Business Recorder, PTA Chairman Agha Saiddain said FBR had once again moved a proposal to the Ministry of Finance suggesting upward changes in the rates of WHT in the budget 2013-14.

According to the proposal, he said, the FBR had proposed increase in WHT of commercial imports from five percent to six percent, for export sector from one percent to 1.5 percent and non-corporate exporter one percent to two percent, on contracts of non-corporate from six percent to seven percent, on supplies of corporate sector 3.5 percent to four percent, on cash withdrawal of corporate sector 0.2 percent to 0.3 percent and for non-corporate 0.4 percent.

Agha said the FBR did not take stakeholders into confidence and instead of widening tax net they had adopted traditional way to squeeze those who already paid taxes. He said “any move to add taxes to export sector would be blunder and detrimental to our economy.” FBR must realise that due to the energy crisis, impact of war on terror, law and order situation our cost of doing business is highest in the region. Pakistan was losing its ground and competitiveness against regional countries, China, India, Bangladesh, and Sri-Lanka, he said.

PTA Chairman said that export sector must be facilitated to earn foreign exchange for the country and it should not be used for revenue collection as was done all over the world. For FBR, it is easy to collect revenue from export sector in shape of Withholding Tax but it can be done without any increase in this head. FBR might introduce export friendly policies, he said, and urged that FBR must set export targets on higher side. With increased exports, the revenue authorities could raise revenue through previous rate of WHT and country will get foreign exchange on one side and people will get employment on the other. Agha said any increase in WHT of export sector would be extremely short sighted and damaging to our exports.

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