960407

Concern voiced

over sales tax

exemption

withdrawal

KHALID ABBAS SAIF

FAISALABAD: The Faisalabad Chamber of Commerce and Industry has expressed grave apprehension over the decision of the Government to withdraw exemption from levy of sales tax for 45 groups of imported as well as locally manufactured items and has demanded grant of exemption for the raw materials, capital goods and basic consumer goods, from sales tax.

In a press statement, President FCCI, Haji Abdul Razzaq stated that we are well aware of the limited options and unlimited constraints available to the Government. On the one hand it is committed under the conditionalities agreed upon with IMF to reduce budget deficit and on the other hand under the world trade agreement Govt is bound to lower the custom tariff to 35 percent within next couple of years.

The Govt finds no best alternative except to withdraw exemptions from the levy of sales tax granted to various items. But crux of the matter is that inflation prevailing in the economy is not under control consequently the budget of common people is under strong pressure, the cost of production is ever escalating, the pace of industrial expansion has halted, exports are under stress, imports are gaining strength and trade deficit is widening. Under such circumstances it is inappropriate to withdraw sales tax exemptions from raw material and capital goods.

He said this move would result in further hikes in the prices. In consequence the life of common man and salaried class would turn harder and industrialists and traders would find it harder to run their business operations.

He said the best strategy to cope with the situation would be to regrant sales tax exemption to all industrial raw materials, ball bearings, disc drive for computer, word processors, milking and dairy machinery, agriculture machinery, electric motors, generators, rice milling machinery, drafting system for spinning and roving etc and to bring all luxuries under the purview of sales tax.