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Pakistan Tanners Association strongly opposes 8 percent turnover tax on services

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by September 2, 2015 General

Karachi, September 02, 2015 (PPI-OT):The export-oriented industries have sharply reacted over the imposition of 8% withholding tax on services that would cause a major financial burden on exports while they were already falling rapidly. The Chairman Pakistan Tanners Association (PTA) S.Z, Hamid A Zahur said in a statement that government should make decisions wisely and reasonably considering the massive constraints of the business community.

PTA chief pointed out that increase in gas charges has been another bombshell on the industry. He said that Due to the petrol shortage in the city supplies were badly affected and many shipments have been failed due to non availability cargo trucks for the last two days are resulting in massive drop of exports. He said that the biggest problem for the exporters is full time load-shedding due to non availability of diesel, generators could not be run.

He earnestly demanded of the government to resolve the matter of 8% turnover tax on services while taking respective stakeholders on board as the tanners are facing a big shortfall of chemicals and skins. He said that due to grim situation of availability of inputs they have to it imports for re-export. At the same time sea and air shipments for exports did not go through following a strike by cargo agents and freight forwarders.

These internal issues are giving a negative image of Pakistan externally and must be resolved amicably and immediately. The government must reconsider exaggerated 8 percent withholding tax on turnover of the services sector as the tax should always be on income and not on the revenue which is against the philosophy of the taxation as some companies have large turnover but small profits while others have small turnover.

He said that the tax seems unnatural which will hurt imports, exports, revenue generation and worsen job situation in the country. Services sector is hard pressed by the development pushing many to close their businesses which will discourage investment in the critical sector paving way for its breakdown, he observed. Hamid asked the Finance Minister Ishaq Dar to find a solution to the issue which is acceptable to all the stakeholders. At the occasion, He said that tax measures will increase cost of doing business and make services costly which is not acceptable.

For more information, contact:
Moinuddin Quraishi
Pakistan Tanners Association
46-C, 21st Commercial Street,
Phase II, Extn., Defence Housing Authority,
Karachi-75500 – Pakistan.
Tel: +92-21-35880180, 35880184, 35899819
Fax: 92-21-35880093


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