Tea importers seek removal of tax anomaly

Published May 18, 2021
The Pakistan Tea Association (PTA) has urged the Federal Board of Revenue (FBR) to remove the anomaly relating to withholding tax on import of bulk packing tea. — AP/File
The Pakistan Tea Association (PTA) has urged the Federal Board of Revenue (FBR) to remove the anomaly relating to withholding tax on import of bulk packing tea. — AP/File

KARACHI: The Pakistan Tea Association (PTA) has urged the Federal Board of Revenue (FBR) to remove the anomaly relating to withholding tax on import of bulk packing tea, which is a raw material for all importers.

The association in a press release on Monday pointed out there was an ambiguity due to two different slabs for withholding tax at import stage causing revenue losses to the government.

It asked the FBR to treat tea in table 2 of 12th Schedule and charge 2pc withholding tax at import stage on all bulk packing, which would not only improve government’s revenue but will also increase legal trade.

The country’s tea imports during 9MFY21 stood at 194,962 tonnes valuing $435 million as compared to 155,372 tonnes costing $376m in the same period last year, showing a jump of 25.5pc in quantity and 15.6pc in value respectively.

The average per tonne price of tea in 9MFY21 fell to $2,231 per tonne from $2,421 in the same period last year, but despite fall in world prices and low cost of import on account of rupee appreciation against the dollar from August 2020 till to date, the consumers had not seen any drastic cut in tea prices.

Footwear industry demands extension of DLTL

Meanwhile, the Pakistan Foot­wear Manufacturing Asso­cia­tion (PFMA) on Monday urged the government to extend in budget 2021-22 the facility of Drawback of Local Taxes and Levies (DLTL) for another three years (July 2021 to June 2024).

Through budget proposals issued in Lahore, the association said since the economy is increasingly driven by import-based consumption, the investment in industry is much less than in comparison to neighbouring countries. “The only sustainable solution is waiving off additional customs and regulatory duties on all raw materials for footwear industry and put them in the lowest slab of customs duty to promote “Made in Pakistan Policy”.

Published in Dawn, May 18th, 2021

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