Lahore Chamber of Commerce and Industry urges Federal Board of Revenue to withdraw SRO 98(1)2013 as it would affect businesses adversely
Lahore, February 22, 2013 (PPI-OT): The Lahore Chamber of Commerce and Industry has urged the Federal Board of Revenue (FBR) to withdraw SRO 98(1)2013 as it would affect the businesses adversely. In a statement issued here Friday, the LCCI President Farooq Iftikhar, Senior Vice President Irfan Iqbal Sheikh and Vice President Mian Abuzar Shad that the SRO 98(I) 2013 would not only increase the financial cost of the businesses but it would also be hitting their cash flows hard.
The SRO 98(I) 2013 says that all companies as defined in Income Tax Ordinance, 2001 as are registered for sales tax, FED or Income Tax, shall be subjected to Withholding Tax at one-fifth (l/5th) of the applicable rate of sales tax on all purchases. Furthermore, the persons registered as exporters are also now to be subjected to withholding tax of one-fifth (l/5th) of the applicable rate of sales tax on all purchases from registered persons.
The LCCI office-bearers said that the said SRO would also come in the way of documentation of the economy because either the manufacturers or importers would start making supplies to unregistered persons or to such registered persons who are not withholding agents.
On the other hand, they said, the withholding agents would also be facing great difficulties in getting raw material from registered persons. And theses withholding agents would, therefore, change their status from companies to AOPs or to Sole Proprietorship.
They said that the SRO would be a blow to the economic activities that are facing an inertia-like situation because of unavailability of gas, electricity and law and order situation in parts of the country. “We need business friendly policies to boost our businesses but it is unfortunate the authorities on the helm of affairs are creating more irritants to retard the economy.”
They further said that these changes would not add revenue to the government exchequer rather they would create hardship for smooth running of businesses that are already suffering from liquidity crunch. The LCCI office-bearers said that the Federal Board of Revenue should concentrate on expansion of tax base by bringing the undocumented sectors into the tax net rather than squeezing the sectors which are already documented.
They said that it was very unfortunate that the SRO was issued without any prior notice or consultation with business community. They said that the role of the FBR should not be only to collect taxes but to ensure enabling business environment in the country.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854