November 13, 2007	Tuesday	Ziqa’ad 02, 1428

KARACHI, Nov 12: The Pakistan Tanners Association (PTA) has strongly opposed World Bank’s suggestion for abolishing zero rating sales tax system for five major export-oriented industries.

In a statement issued on Monday, S M Naseem, the PTA chairman advised the Federal Board of Revenue (FBR) not to pay heed to such ideas of the WB as it would not only damage the interests of industry but also of the national exchequer.

He said that as per the FBR assertion there was a time when the amount paid towards refunds was much higher than the GST collections and this was only because a large number of fake refund claims were made through ‘flying’ invoices.

Huge payments towards fake refund claims created problems for genuine exporters, who suffered from long delays for payment. This hurt their business interests as they could not meet their export contracts, he added.

The PTA chief further said due to misuse of the sales tax refund facility a new class of exporters emerged, which only survived on refunds obtained on fake invoices. But the process caused severe damage to the genuine exporters and industry.

After the FBR’s decision to allow zero rating to major five export-oriented industries, including leather the number of genuine manufacturers and exporters has increased due to the level-playing field provided to all.