Pakistan likely to levy 10pc regulatory duty on raw and grey cotton

At a meeting held by the National Assembly of Pakistan and Standing Committee on Commerce, it was announced that the government is considering levying a 10 percent regulatory duty on raw and grey cotton to discourage the export of raw material in bulk. Siraj Mohammad Khan, chairman Standing Committee on Commerce, addressing office bearers and members of the Karachi Chamber of Commerce and Industry (KCCI), said that exporters of cotton would protest against such levy, but the proposal was in the interest of the country.

Members of National Assembly (MNAs) and committee members Choudhry Asad-ur-Rehman, Muhammad Pervaiz Malik, Mian Muhammad Rasheed, Tahira Aurangzeb, Makhdoom Syed Ali Hassan Gillani, Mussarat Ahmad Zeb, and Sajida Begum also accompanied the chairman and met with the business community.

Khan said that Pakistan’s problems were too many, but resources were few, so it was necessary that economic issues were resolved in consultation with the business community. They proposed that sales tax rebates of the businessmen should be given to them in the shape of subsidy on electricity and gas bills.

Muhammad Pervaiz Malik, treasury member of the committee, said that tax to GDP ratio at 9.5 percent was too low and there was a need to bring non-filers into the tax net. Withholding tax of 0.3 and 0.6 percent on bank transactions was to bring more non-filers in the tax net.

Earlier, Muhammad Ibrahim Kassumbi, senior vice president KCCI, in his presentation said that Karachi gave 65 percent of the country’s taxes and contributed 25 percent in GDP, but it was neglected and its infrastructure dilapidated.

Sindh was receiving around Rs700 billion from the National Finance Commission (NFC) Award, of which not even Rs7.0 billion were spent on Karachi. Sindh government as well as the federal government should own Karachi.

Trade deficit of Pakistan reached $20 billion because of heavy levies on trade, which promoted smuggling in the country. Reduction in taxes on import would discourage the smuggling. The sales tax rate in Pakistan was higher in the region, which led towards tax evasion and other illegal means to avoid it. The taxation policies were a major hurdle in promoting the exports.

For a better business environment, there is a need for better law and order situation along with a corruption free environment.