Pakistan Yarn Merchants Association (PYMA) of Sind and Baluchistan region, have strongly criticised the imposition of 4 per cent withholding tax instead of 1 per cent.
In a letter addressed to the Chairman of Federal Board of Revenue (FBR), Muhammad Saqib Goodluck, Chairman, PYMA, said that during meetings with FBR, imposition of 1 per cent withholding tax was agreed but FBR clarification says it is 4 per cent.
Terming the decision ‘unacceptable’, he said that this step could prove to be highly disastrous.
Muhammad Sadiq added that “On buying cotton from ginners, deduction of 4 per cent from invoice will put more pressure on ginners to minimise the cost of cotton.”
Also, it’s important to note that from yarn manufacturing to garment manufacturing, imposition of every tax will have high negative effect on cost and local raw material. Notably, the local manufacturers, spinning units and commercial importers of yarn work at low margin but large volume.
