Global Rice News

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly opposed a proposal in the federal budget to replace the fixed income tax regime for exporters with a 29% tax on profits. This move has been widely criticized by industry leaders and has sparked outcry among Pakistan’s export sectors.

Saqib Fayyaz Magu, Senior Vice President of FPCCI, along with representatives from various industry associations, voiced their concerns at a press conference. They warned that the proposed budget measures would increase harassment and corruption by the Federal Board of Revenue (FBR), leading to a negative impact on investors. Magu described the proposed law as draconian and called for its immediate withdrawal, stating that businessmen should not be subjected to non-bailable arrests. If the decision is not reversed, a nationwide consultation with export industries will be held to determine their response.

Chairman of the Rice Exporters Association, Chela Ram Kiwalani, and Chaudhry Muhammad Israr Sharif criticized the timing of the proposal, noting the potential damage it could cause to exports during an already challenging economic period.

Abdul Rahim Janu highlighted that exporters already face taxes amounting to 30-35% of their profits. Under the new National Tax Regime, a 29% tax on exports combined with a 10% super tax would bring the total to a staggering 39%. Janu warned that abolishing the fixed tax regime could result in a $6 billion reduction in exports, citing a similar failed system 15 years ago due to corruption and misuse.

The business community is united in its opposition to the proposed tax changes, cautioning against dire consequences if they are implemented.

Concerns of Telecom Operators

In addition to the concerns raised by the FPCCI, Pakistan’s Telecom Operators Association has also expressed concerns over heavy taxes introduced in the budget. In a letter to the chairman of the Standing Committee on Finance, Salim Mandviwala, the telecom operators highlighted the potential negative impact of unresolved tax issues on foreign investment and the government’s Digital Pakistan initiative.

The telecom sector warns that unresolved tax issues may lead to legal complications and the withdrawal of foreign investment. The sector has contributed PKR 340 billion in tax revenue in the past year and has attracted USD 15 billion in direct investment to date. The implementation of budget proposals could severely affect the development of a Digital Pakistan.

The letter from the telecom operators also mentions concerns about collecting 75% advance tax from non-filer telecom users, which is considered impractical. The decision to block SIM cards of non-filers could result in revenue loss for both the telecom sector and the government. The telecom operators have requested a meeting with the Committee Chairman to present their concerns.

Source: https://www.nation.com.pk