Daily Times

FPCCI acting president Shabbir Mansha has expressed his profound concerns about the glaring anomalies in the federal budget for 2022-23. We have noticed anomalies in custom duties, regularity duties, income tax, and sales tax, he added.

Mr. Shabbir Mansha noted that a turnover tax of 1.25pc for traders, distributors, and dealers is unbearable as profit margins are barely 2pc in market sales and the turnover tax will continue to discourage SMEs from being registered in sales tax.

Acting FPCCI Chief pointed out that 4.5pc withholding tax on local sales; but, normally trade margins are between 2 – 3pc and there is no way a business can absorb a 4.5pc withholding tax and continue to operate viably. Therefore, sellers find it more viable to buy goods at 20pc taxes; when accounting for additional duty of 3pc on commercial importers on top of 17pc sales tax and delist from the sales tax.

Mr. Shabbir Mansha demanded that there be no disparities in the rates of sales tax on raw materials at the import stage between commercial and industrial importers. He maintained that under section 8 (b) of the sales tax act 1990, input tax adjustments in excess of 90pc of the output tax is not allowed. This condition should be withdrawn; as the same has been already extended to companies operating in various sectors. Furthermore, withholding tax on the import of raw materials should be the same for industrial and commercial importers.

Mr. Shabbir Mansha has proposed that at the stage of deregistering from the sales tax system, the condition of prior audit should be withdrawn to facilitate exit after three years; provided a company, individual, or association of persons (AOP) was filling a null return for the past five years due to discontinuation of their businesses.

On the withdrawal of NIC condition through amending the section 23(I)(b), FPCCI has appreciated the government; but, maintained that the Finance Bill 2022 should categorically state that no NIC would be required for sales to non-filers. Mr. Shabbir Mansha also raised the issue of 12pc tax under section 233(1). Additionally, freight and transportation charges under section 153(1)(b) at 3pc should only be applied to the final tax region.