PHMEA rejects proposed amendments to tax regime

FAISALABAD: The Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) has rejected proposed amendments to Final Tax Regime (FTR) and Normal Tax Regime (NTR) in the federal budget 2024-25.

At a press conference here on Tuesday, group leader Salamat Ali, alongside other officials, demanded that the government provide a roadmap for the payment of long-overdue refunds to exporters instead of transitioning from Final Tax Regime to Normal Tax Regime. He said the exporters were already paying one per cent final income tax, and the new tax laws would merely empower the Federal Board of Revenue (FBR) officials to harass the exporters, leading to increased corruption. Under the Final Tax Regime, 100pc income tax is already deducted from the exporters’ sales, rendering the shift to Normal Tax Regime unnecessary. He also criticized the recent reduction in the mark-up rate by 1.5 per cent, calling it insufficient. He urged that it be further reduced to single digit to revive economic activities.

Salamat pointed out that exporters were already facing a crunch due to paying 18 per cent sales tax, development surcharges and various federal and provincial department payments. He warned that due to rising production costs, the exporters lost their competitive edge globally, and such measures could force partially operational industries to shut down completely.

PHMEA Chairman Naheed Abbas lamented the lack of consultation with industrial organizations regarding the proposed federal budget, describing it as regrettable. He argued that instead of suppressing the value-added textile sector, the government should facilitate it to boost exports, thus preventing further problems for the country including increased unemployment and poverty.

Faisalabad Chamber of Commerce and Industry President of Dr Khurram Tariq said the current tax system was unjust, leading to relocation of 17,000 business individuals to Dubai.

Former PHMEA senior vice chairman Rana Altaf criticized the government policy of imposing additional tax burdens on current taxpayers and exporters instead of identifying new taxpayers and bringing the non-taxpayers into the tax net.

Other members present at the press conference included Zia Alamdar, Javed Aslam, Muhammad Saleem, Rashid Mahmood, Shaheen Tabassum and Asif Iqbal.