Taxation Woes for Garment manufacturers and Custom Agents

Readymade garments: government will address problems, Haroon tells importers, custom agents

Special Adviser to Prime Minister on Revenue, Haroon Akhter Khan has assured readymade garments’ importers and custom agents of immediately addressing their problems related to the Federal Board of Revenue (FBR). He gave this commitment to a joint delegation of the All Pakistan Customs Agents Association (APCAA) and All Pakistan Garments Importers Association (APGIA) who called on him on Wednesday.

The Special Advisor was informed that the FBR has recently increased the values of readymade garments by two times to eight times as a result all the imported garments have become manifold expensive and paved the way for smuggling which will deprive national kitty much needed revenue as well as shutdown the businesses of thousands of the traders. The Advisor on the spot directed the Valuation Department of FBR to rationalise the values and address the problems of the traders.

Arshad Jamal, Senior Vice President APCAA and Jalal Mehmood Khan Joint President APGIA gave a presentation to PM advisor explaining that the values of readymade garments were enhanced by the FBR Valuation Department by two to eight times without taking the stakeholders into confidence. They said that the FBR avoided the basic concept of transactional values.

While briefing the PM Advisor, Arshad Jamal informed that before 2007 Pakistan was not importing readymade garments but after as a result of the association’s efforts import of readymade garments was started which was supported by the FBR as a result the tax network increased and the volume of import also increased in billions. He said that fabric blankets and readymade garments have a big volume and by giving the incentives to this sector the smuggling of these articles was declined and it also helped government to collect sufficient revenue in the shape of taxes.

He stated that at the moment importers of readymade garments were paying approximately 56 % of tax on the imports which is too high and is discouraging the traders consequently importers are not in a position to continue importing these items which will promote smuggling channels.

President APGIA Muhammad Sajid and Faisal Shezad, President Rawalpindi Garments Association M Fiaz and, SH Muneer Lahore Shah Alam market were also present on the occasion. After getting detailed briefing, Haroon Akhter assured them of resolving their issues, saying that to curb smuggling and enhancement of tax network is the policy and vision of the Government of Pakistan. He agreed that the sector was affected by smuggling and the government does not want to discourage the tax payers. He issued directions to the Acting DG Valuation FBR to listen to stakeholders’ viewpoint to make the entire process rationalise.

Copyright Business Recorder, 2016

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