APTMA pays Rs4 billion in taxes to ‘save image’

Says end product producers must pay 5% refundable tax, not spinners.

LAHORE: Member companies of the All Pakistan Textile Mills Association (Aptma) have paid Rs4 billion in taxes in a bid to protect the goodwill of the industry as the Federal Board of Revenue (FBR) could not track down manufacturers of finished textile products for collecting 5% withholding tax on exports.

Speaking at a press briefing here on Tuesday, Aptma’s Acting Chairman Wisal Ahmad Mannoo dismissed the perception that Aptma members did not pay due taxes. He cited SRO 154 according to which a refundable tax of 5% should be paid by the company producing end products for export. The SRO does not bind the spinners to pay the tax and their liability is zero.

“Owing to such tax system, people started registering fake companies. They purchased raw material from us and after processing sold it in the local market instead of export. The FBR, after failing to find out these bogus companies, called us and asked to pay the tax, which should actually be paid by the manufacturers of end products,” Mannoo said.

“Our industry is fully documented and we do not want to create a bad image for our lobby, so we decided to pay Rs4 billion in taxes,” he stressed.

FBR Chairman Ali Arshad Hakeem, who was scheduled to arrive at the press briefing, could not turn up, he, however, talked to the media by telephone. “We only want industries to pay taxes, we do not want to scandalise them,” he said.

In the past, he said, despite getting taxes industries were being scandalised, as a result the FBR failed to collect taxes from them. “We want taxes and Aptma has paid, which gives us confidence to recover more,” he said.

Published in The Express Tribune, April 3^rd, 2013.

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