Daily Times

ISLAMABAD: Pakistan Chemicals & Dyes Merchants’ Association has said that FBR had tried to create difference amongst the business community i.e. amongst commercial and industrial importers of industrial raw materials.

Chairman PCDMA, Khawaja Arif Kapoor remarked, “It is a fact that some genuine and mostly fake industries (registered as industries in connivance with FBR officials) import excessive quantities of industrial raw materials. (They do this by) taking advantage of the differences in WHT, ST, Value addition etc. and then resell them in commercial markets. (Not only do they) take over the business of commercial importers, (they also) deprive the national exchequer of the due revenue.”

He added that the commercial importers of industrial raw materials have always demanded an end to the marked discrimination between industrial and commercial importers of industrial raw materials. Kapoor believed that the commercial importers do not compete with the genuine industries, but facilitate them by forming an essential part of their supply chain.

“By charging excessively high WHT and Value Addition tax on commercial imports, FBR is increasing the production cost of local industries as compared to the imports of cheap finished products and is also hampering the exports of finished products from Pakistan” he added.

Kapoor also noted, “our proposal was that FBR should reduce the WHT and value addition rates on raw material imports to a rate near the effective rate of Income Tax and Value addition collected from the industrial sector. All taxes at import stage should be applied on the basis of products and not on the basis of types of the importer. This shall remove the problem of fake industries.”

He went on to say that the current proposal by FBR of not reducing the WHT rates and conducting audits of industries, which have sought an exemption, shall only work as a tool of harassment and corruption. He believed that the past experiences have shown that the fake industries will continue to enjoy exemptions and thereby, destroy the commercial markets whereas FBR will increase the cost of the business for genuine businessmen.