The Pakistan Yarn Merchants Association (PYMA) has rejected 4% withholding tax imposed on textile value chain.
In a statement issued Tuesday, Chairman of PYMA, Muhammad Saqib said that in a meeting with the Federal Board of Revenue (FBR), it was agreed that only 1 percent withholding tax would be imposed on the yarn.
But unfortunately, the FBR imposed a 4% tax on the entire value chain, including the doubling, twisting, knitting and weaving sectors, he said.
Saqib said the 4 percent tax would prove disastrous for the entire textile value chain as the advance tax could not be levied on the total amount of each receipt.
He then added that a deduction of 4 percent on the bill would increase the pressure on ginners to reduce the cost of cotton. In fact, they must be responsible for ginning costs which is 35% of ginned cotton.
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