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Dittu wants ST ratesnot more than 5 pcRECORDER REPORT

KARACHI: Fazal-ur-Rehman Dittu, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has said that the sales tax rates are exorbitantly higher in Pakistan and suggested that they should not be more than five percent.

Replying to a question during a press conference held here on Monday, the Federation Chief said that problems pertaining to sales tax continued to haunt the manufacturers, retailers exporters and importers, and added that FPCCI had held several meetings with the previous and present governments for undoing the wrongs done to the businessmen through the Federal Budget 1999-2000 and through provincial budgets, but except for some minor rectifications, their difficulties and their problems by and large continued, to adversely affect their economic activities. The problems mainly pertain to sales tax, which remained unresolved.

He said the problems being faced by the exporters included inordinate delay in refund of sales tax. The best lot among the exporters was classified in the Gold, card category and it was promised that the refunds would be made to them in 72 hours of the filing of the return claims but even their refunds were being delayed and one could imagined the plight of the exporters who were not so classified.

The Federation President said that the optimum utilisation of the existing capacity of the industrial sector and the boosting of exports could give a quick turnaround of the national economy. This would require urgent measures by the government to remove the bottlenecks that were holding up progress in both the sectors.

The drive for recovery of bank loans and government arrears launched in the wake of the directive of the new government had unnerved businessmen, big and small alike, even those who had rescheduled their loans were arrested and also those whose cases were in appeal. An air of uncertainty prevailed as nobody knew who would be nabbed next. This situation should not be allowed to continue for long, he said.

There are complaints that the claims of exporters are deferred for an indefinite period for want of verification of invoices. He suggested that a time limit be fixed for refund in all cases, which should be strictly followed.

He also suggested that a pass book be issued to all the exporters and an entry system be devised where neither payment of sales tax nor refunds would be required.

He stressed the urgent need for establishing an Industrial Cost Commission so that there was a regular review of the impact of costs of various inputs, government levies and utilities charges on production costs so as to make Pakistan industrial products competitive in the international market.

Dittu said there was no coordinated effort at the government level to reduce the cost of industrial production. He suggested that as a short term measures, it would be a big help to the manufacturers-cum-exporters if special electricity and gas rates were offered to them by the concerned agencies.

Dittu said that it would also be helpful if the State Bank of Pakistan allowed export refinance to the manufacturers-cum-exporters at concessional rates on the basis of value-addition.