Sindh Revenue Board notices likely to deprive country from foreign exchange warns: Younus Bashir

Karachi, February 02, 2016 (PPI-OT): President of the Karachi Chamber of Commerce and Industry (KCCI) Younus Muhammad Bashir, while appreciating numerous initiatives taken by the Sindh Revenue Board (SRB) towards enhancing the revenue collection of Sindh province, said that SRB should be very careful and act wisely in deciding which sectors really need to be taxed as any unwise decision, in this regard, may prove detrimental for the economy.

Referring to SRB’s decision to impose 14 percent sales tax on indenting businesses, President KCCI stated that this unjust tax was likely to result in depriving the country from the desperately needed foreign exchange being earned by the indenters who are struggling really hard to stay afloat due to intense competitive environment.

President KCCI Younus Muhammad Bashir was exchanging views during a special meeting held to discuss and seek recommendations for Sindh Budget 2016-17. Besides Younus Bashir, the meeting was also attended by Former President KCCI AQ Khalil, who is also leading a Committee formed to look into the issue of services tax on Indenters, Senior Vice President Zia Ahmed Khan, Former President Khalid Firoz, Chairman Provincial and Local Taxes Sub-Committee KCCI Azhar Wasimpuri, Former SVP KCCI Muhammad Ibrahim Kasumbi and KCCI Managing Committee members.

Keeping in view the grievances being faced by concerned businessmen, President KCCI requested the SRB to stop sending notices to indenters as the question whether this unjust tax should be really imposed on indenters or not is yet to be resolved and negotiations between all stakeholders, SRB and Sindh government were underway in order to look for a feasible solution.

“It was highly unfair to demand such an irrational tax from indenters who have been earning foreign exchange for the country and instead of appreciating their efforts, the government has decided to penalize them by imposing such an illogical and groundless tax”, he added.

He pointed out that the indenters are not liable to pay service tax because they are not providing any local services and they are already paying 5 percent Withholding Tax (WHT) to the federal government on such export earnings.

Recalling Chairman SRB’s last visit to Karachi Chamber, Younus Muhammad Bashir said that Tashfeen Khalid Niaz, during his last visit, advised KCCI to form a committee to review the imposition of Services Sales Tax on indenters and analyze whether it was rational or not. “Although a committee, comprising Vice Chairman Businessmen Group and Former President Anjum Nisar, Former President KCCI AQ Khalil, Former President KCCI Khalid Firoz and Former SVP KCCI Muhammad Ibrahim Kasumbi, was timely formed by KCCI and recommendations were accordingly given but the issue stands unresolved to date”, he added while expressing deep concern over issuance of notices to indenters.

President KCCI pointed out that the indenters work on a very low rate of commission and face fierce competition in the international markets. They negotiate with foreign suppliers for the most competitive prices of raw materials and other products at a commission as low as 0.5 percent to 1 percent. “Imposing 14 percent service tax on such a meagre commission, which is already subjected to 5 percent WHT by Federal Government, would surely make it impossible for this business to stay afloat and it was likely to results in depriving the country from substantial foreign exchange being contributed by this particular sector”, he added.

Referring to the anxiety amongst concerned businessmen who approached KCCI for assistance, he urged Sindh Minister for Finance Murad Ali Shah and Chairman Sindh Revenue Board Tashfeen Khalid Niaz to take notice of the situation by issuing strict directives for preventing notices being sent to indenters until this issue is amicably resolved.

For more information, contact:
Aamir Hassan
Director Press/Electronic Media and Public Relations
Karachi Chamber of Commerce and Industry (KCCI)
Aiwan-e-Tijarat Road, Off Shahrah-e-Liaquat,
Karachi-74000
Phone: +92-21-99218001-09
Fax: +92-21-99218040
Email: info@kcci.com.pk, secretary@kcci.com.pk
Website: www.kcci.com.pk