Double tax on leather flayed

Tag : garments leather


Double tax on leather flayed


By Our Staff Reporter

KARACHI, June 19: Pakistan Leather Garments Manufacturers andExporters Association (Plgmea) has criticised double tax on leathergarment industry at the import and export stage.

Plgmea chairman Fawad Ijaz in a statement on Thursday that thefederal budget 2008-09 imposed two per cent withholding tax on allimports and exemption certificate for this tax is not being issuedto the manufacturer-cum-exporters.

As a result of this, he said, now exporters will have to fileclaims for refund of withholding tax, which is a very lengthyprocess and will block huge funds of the exporters with income taxdepartment.

Mr. Fawad explained that the export proceeds of leather garmentexporters were already taxed at 1 per cent under section 154 ofIncome Tax Ordinance 2001, which is considered full and finaldischarge of tax liability of the exporters.

Manufacturers-cum-exporters, who were registered in the Sales Taxdepartment, were exempted from 1 per cent withholding tax at theimport stage vide the federal budget 2006-07.

Previously, the income tax department was issuing exemptioncertificates to the manufacturer-cum-exporters so that they did nothave to deposit withholding tax at import stage. Now 2 per centwithholding tax has been imposed on all imports in the new budget.

He further said that the exporters, who have already got exemptioncertificates valid till June 30 are also being charged 2 per centwithholding tax on imports from June 12.