Yarn merchants reject 4.0pc WHT on textile value chain
KARACHI: Pakistan Yarn Merchants Association (Sind & Baluchistan Zone) has strongly reacted over imposition of 4.0 percent withholding tax instead of 1.0 percent, as notified by Federal Board of Revenue (FBR) in a clarification. Chairman of the association Muhammad Saqib Goodluck said during meetings with FBR, imposition of 1.0 percent withholding tax was agreed over textile value chain including doubling, twisting, knitting, and weaving, ''but a clarification from FBR says imposition of 4.0 percent withholding tax instead of 1.0 percent on whole textile chain, it is not acceptable at any cost". Saqib Goodluck in a letter to Chairman FBR, declared this step of FBR highly disastrous as collection of advance income tax on total amount of every receipt would increase the cost manifold. He further said local manufacturers, spinning units and commercial importers of yarn worked at low margins due to large volume. Deduction of advance tax on value of receipt would worsened the liquidity crunch for the industry because refunds were issued after long delays. "Therefore, for the survival of whole textile value chain, withholding tax at the rate of 1.0 percent must be collected," Goodluck said.