March 07, 2007	Wednesday	Safar 17, 1428

ISLAMABAD, March 6: The Pakistan Vanaspati Manufacturers’ Association (PVMA) has proposed a range of taxation measures for the budget 2007-08, saying it is the only option to bring down edible oil prices in the domestic market.

“The subsidy of Rs6 per kg on vegetable ghee through Utility Stores Corporation (USC) of Pakistan on the base price of Rs67.30 per kg will only benefit 10 to 15 per cent consumers,” said PVMA secretary Dr Ghulam M. Samdani.

He said the PVMA member units will not only financially suffer because of intense competition within the association, but low-income population will face the same situation as was the case when sugar was subsidised.

The PVMA delegation, led by its chairman Shaikh Amjad Rashid, discussed the proposals with the chairman, Central Board of Revenue (CBR), and secretary, ministry of industries and production for consideration in the upcoming budget.

The budget proposals, among others, included methodology for computation of withholding tax and its deduction on imported edible oils at import stage, rationalisation of customs duty and other taxes on imported edible oils in proportion to the increase, decrease in their prices in the international market, extension of same customs duty on crude palm oil refineries and refineries within the PVMA member units.

Other proposals include refund of excess income tax of 1.75 per cent on export of vegetable ghee / cooking oil, reduction of customs duty on imported tinplate in view of concession enjoyed by M/s Siddiqsons Tinplate (Pvt) Ltd and enhancement of customs duty on imported palm stearin, as well as tallow.

The PVMA delegation felt that the government had collected additional revenue at the rate of Rs2.5 per kg in Federal Excise Duty and Withholding Tax as a result of increase in the import price of RBD palm olein since January, 2006.

It was proposed that the government should seriously consider reduction in sales tax / federal excise duty of Rs2.5 per kg as the same benefit would be passed onto consumers immediately by the PVMA member units.

The delegation also raised the issue of export of vegetable ghee from manufacturing bond since the CBR, through SRO 43 of 2007 issued on Feb 20, 2007, had removed restriction in this regard.

The prohibition of export of vegetable ghee and cooking oil from manufacturing bonds was made under an SRO (March 7, 2002 of the ministry of commerce).

Since, the CBR has removed the restriction, export of vegetable ghee through manufacturing bonds by land routes should be permitted, the PVMA demanded.