FBR forms committee to facilitate members of EPZs

KARACHI: Federal Board of Revenue Chairman Ashfaq Ahmed on Monday said convenience of investors would be taken into consideration to ensure collection of general sales tax and income tax in export processing zones.

The chairman has also announced a three-member committee to address the issue.

“The purpose of the committee is to minimise the hurdles in obtaining GST and income tax. The refund of GST will be made within 48 hours,” said Ahmed said while meeting investors during his visit to the Karachi Export Processing Zone.

“The cooperation of zone investors will be a significant factor in the boost of the country's economy and exports,” he added. The chairman also assured the zone investors of all possible cooperation.

Following the imposition of GST on the import of raw material in the mini-budget, exporters and other industries such as pharmaceuticals have been crying foul over the issue.

Exporters claimed that they faced liquidity issues because the imported raw material was consumed over a long period of time, and since the refund claims were to be filed following proof of sale, the funds remained with the FBR for far too long.

The FBR allows claiming refunds within two days, but only after submission of proof of sales.

The FBR chairman also visited the Karachi Chamber of Commerce and Industry (KCCI), where he disclosed that the revenue body was working on a “tax arbitration plan” to resolve tax disputes quickly and smoothly. “I will be meeting with chief justices of all four high courts of the country next week after having one with Islamabad High Court.”

FBR chief also sought the KCCI’s proposal to have the industry’s input in the plan so expedite the implementation of the plan.

Replying to the issues raised by the KCCI members, Ahmed said that withholding tax (WHT) should be levied on income rather than on transactions and declared that he would recommend abolishing further tax. Besides rationalising, import tax to help ease inflation.

The chairman said that Pakistan has entered into International Monetary Fund (IMF) programmes more than twenty times and that frequent loan programmes “make policy making complex for us”.

He pointed out that revenue collection was 10 percent of the GDP. On the flip side the expenditure is 20 percent of the GDP.

“We borrow about 8 percent of the GDP to bridge the fiscal deficit,” he said.

Ahmed also listed current account deficit as one of the biggest problem as the country depended on imported things. “We are spending huge foreign exchange on import of petroleum products,” he said, adding that palm oil was another large component of imports.

He said that the FBR would surpass the current year’s revenue collection target and attributed the over the target collection to the business community. “The business community performed well.”