ISLAMABAD:Former President ICCI Shahid Rasheed Butt on Wednesday said the export sector should not be subjected to indirect taxation so that they could pay full attention to boosting exports.
Refund system is wasting time and resources of the exporters which is hindering them from competing with rival countries like India and Bangladesh in the international market, he said in a statement. The tax received from exporters is shown as income which is not easy to get back, therefore, the system of refunds must be abolished for good, he added.
Butt said that there was no rationale in collecting money that was refunded and showing it as revenue amounts to deceiving oneself. The countries that developed their economies and reduced poverty facilitated exports and improved their image but here a faulty refund system has been introduced which has become a problem for investors.
He noted that the refund system remained out of order for five months during 2019 resulting in closure of 20 percent small export companies while others have to cut staff and production in order to survive. Big export companies avoided closure by securing bank loans while the exports picked up after the computer system was fixed but the issue of delayed refunds was not resolved.
He said: “Application for a refund by exporters are blocked if any of the vendors have not paid sales tax while it take months even if everything is according to the requirement of the FBR. How can a company work properly if its fifty percent working capital is stuck with the FBR and it is more concerned about getting back its money rather than focusing on exports?”