Leather and textile FBR begins withdrawing concessions
Move comes as part of government’s bid to comply with IMF’s conditions.
ISLAMABAD:
The Federal Board of Revenue (FBR) has started withdrawing the concessions provided to the textile and leather sectors, in order to address the reservations of the International Monetary Fund (IMF).
The amendment has abolished concessions given in the rate of sales tax on 57 items and raw materials used in the textile and leather sectors. The items include soda ash, polythene bags and other raw materials used in leather manufacturing.
A senior FBR official told The Express Tribune that IMF had appreciated the government’s efforts to increase tax receipts through removal of sales tax concessions given to zero-rated sectors. However, serious reservations were later expressed about reducing sales tax rates for the textile and leather sectors to six and four per cent, respectively, and resumption of zero-rating facility on some items, but now Pakistan is trying to fulfil most of the conditions of the IMF before the visit of its delegation scheduled for May 8.
The source said that FBR and other economic managers were trying to put the IMF programme back on track, which will also help Pakistan obtain $1 billion held by the World Bank and the Asian Development Bank (ADB). He added that the release of this fund was important as Pakistan was facing difficulties in preparing the budget for the next fiscal year.
Published in The Express Tribune, May 1st, 2011.
The Federal Board of Revenue (FBR) has started withdrawing the concessions provided to the textile and leather sectors, in order to address the reservations of the International Monetary Fund (IMF).
The amendment has abolished concessions given in the rate of sales tax on 57 items and raw materials used in the textile and leather sectors. The items include soda ash, polythene bags and other raw materials used in leather manufacturing.
A senior FBR official told The Express Tribune that IMF had appreciated the government’s efforts to increase tax receipts through removal of sales tax concessions given to zero-rated sectors. However, serious reservations were later expressed about reducing sales tax rates for the textile and leather sectors to six and four per cent, respectively, and resumption of zero-rating facility on some items, but now Pakistan is trying to fulfil most of the conditions of the IMF before the visit of its delegation scheduled for May 8.
The source said that FBR and other economic managers were trying to put the IMF programme back on track, which will also help Pakistan obtain $1 billion held by the World Bank and the Asian Development Bank (ADB). He added that the release of this fund was important as Pakistan was facing difficulties in preparing the budget for the next fiscal year.
Published in The Express Tribune, May 1st, 2011.