WHILE our country badly needs to encourage exports for earning precious foreign exchange, our government has recently imposed a five per cent income tax on import of textile machinery by industries and three per cent income tax if an exemption certificate from the IT department is submitted.
This is indeed illogical to presume that industries importing textile machinery for modernisation or expansion or renovation will earn any taxable profit by just installing imported machines.
Rather industries with the help of the machinery will develop their production and expand exports for the benefit of the country, in addition to creating more jobs.
It is unjust to impose any income tax on import of textile machinery by genuine industries which are planning to install imported machines in their factories.
This move by the government must be protested at all levels by all stakeholders.
Second, the industries importing textile machinery for installation are required to submit to customs at the time of clearance 20 days post-dated cheque for 16 per cent of import value as sales tax, which is to be returned when the copy of sales tax return for the next month is submitted.
This must be done to prove that they have not claimed any input of sales tax for machinery import. This is another hassle created for industries, and need to be removed urgently as no industry is supposed to import machinery for sale in the market.
I hope the government will remove such obstacles for industries which are seeking to develop the export potential for the sake of our country’s progress.
SIDDIQ KAPADIA Karachi