KARACHI - Five export-oriented sectors’ associations have expressed their apprehensions over FBR’s proposal for making hefty increase in Sales Tax in the budget, and have demanded zero rated tax regime, no payment, no refund system.

They have warned that if their pending sales tax refund claims, customs rebate claims and DLTL claims were not settled by the government, they will hold protest demonstrations all over the country.

Speaking at press conference at the PHMA House here on Wednesday, Muhammad Jawed Bilwani, Chief Coordinator, Five Export Sectors’ Associations, flanked by the chairmen and representatives of these associations, referred to recently reported FBR’s proposals for making hefty increase in Sales Tax and withdrawal of exemptions from Withholding Tax on power bills, and termed these the most alarming news for the export sector.

“The proposals have sounded the death knell for our exports. This goes contrary to the announcement made by the prime minister for a zero-rated tax regime for the export sector in the upcoming budget,” he said, adding,

“This FBR’s proposal is draconian, which will surely destroy exports of our value added zero rated sector.”

He said it looked obvious that the FBR was not interested in increasing tax revenues by bringing in new taxpayers in the tax net, including millions of retailers, shopkeepers and many others, who earn huge amount of money but do not pay taxes.

“Instead of working hard to generate revenues by taxing these segments of population, the FBR finds it really convenient to punish and penalise the already registered taxpayers: the exporters who are already paying huge amount of taxes at all levels. This clearly amounts to an attempt by the FBR to shirk of responsibilities and duties,” he lamented.

He said it was clear that the FBR was not at all interested in finding new sources for collecting taxes. “These proposals make it obvious that the FBR is going against the firm commitment of the prime minister,” Bilwani said.

“Only 0.3 percent of Pakistanis, or a mere 500,000 individuals, pay direct taxes, according to a report by Advocacy Group Research and Advocacy for the Advancement of Allied Reforms (RAFTAAR),” he said, and added, “In contrast, roughly 32 million, or 3 percent Indians, pay direct taxes, despite having a large portion of population below poverty line.”

He reminded that prime minister had also promised to announce an incentive package for the exporters in the meeting with exporters in Islamabad. “Eight months have passed, no package has been announced as yet,” he deplored. He said the most unfriendly attitude of the so called business friendly government was not only astonishing but also confusing.

Bilwani reminded that none other than the Finance Minister Ishaq Dar had promised on the floor of the National Assembly in his last budget speech that the refunds, due to the export oriented sectors, relating to tax periods till May 31, 2015, shall be issued by August 31, 2015.

“Still billions of rupees of the exporters, pending under the head of Sales Tax Refund Claims, have not been cleared,” he lamented. He and the chairmen of these associations demanded the federal government to speedily disburse all held up payments of the exporters; revive Zero Rated Tax Regime, No Payment No Refund System, and announce the promised incentive package for the export sectors.