02 January 2005	Sunday	20 Ziqa'ad 1425

KARACHI, Jan 1: The Central Board of Revenue (CBR) has been asked to give indirect exporters a status equal to direct exporters who are allowed to deduct withholding tax at source.

In a message to CBR Chairman Abdullah Yousuf, the President of the Union of Small and Medium Enterprises (Unisame), Zulfikar Thaver, raised the issue. He pointed out that since the government recognized indirect exporters and had also made them eligible for export refinance, therefore, they should get equal status on tax side as well.

He further said that banks while crediting the account of direct exporters deducted withholding tax on the export bill and the exporter was relieved of fulfilling cumbersome statements and instead simply gave the export figures and withholding tax deduction thereon.

Mr Thaver urged the CBR chairman to accord this facility to indirect exporters who were the source of supply to the direct exporters and were actually in the activity of manufacturing or packing and many a time export goods were directly despatched to the port from their premises.

He said that many a time SME exporters were compelled to transfer Letters of Credit (LCs) to the manufacturers who insisted that LCs should be in their name as they felt comfortable to pay withholding tax rather than pay taxes on local sales as they had to provide detailed statements on tax returns as indirect exporters.

With the advent of WTO quota free regime, he said the SME exporters needed to be facilitated otherwise large manufacturers would swallow and shun the SMEs, which are the large job providers in the country.