ISLAMABAD: The Senate Standing Committee on Finance and Revenue, under the leadership of Senator Saleem Mandviwalla, convened at Parliament House to discuss the upcoming budget with representatives from major industries. The meeting focused on the challenges faced by sectors such as textiles, poultry, dairy, steel, property development, and consumer goods, alongside their recommendations for policy changes.
The towel manufacturing sector reported exports nearing $2 billion, making up 18% of national towel exports. They voiced concerns over sales tax refunds, often delayed by six months, and suggested reviving SRO 112 while addressing the Export Facilitation Scheme’s misuse. The sector also pressed for electricity subsidies for SMEs and the removal of the 2% normal tax.
Kamran Arshad, Chairman of the All Pakistan Textile Mills Association, highlighted stagnant textile exports over two years and criticized the EFS scheme. He noted the detrimental effects of an 18% sales tax on local cotton and duty-free foreign cotton imports. APTMA called for yarn and fabric to be placed on a negative list, electricity rates fixed at 9 cents per unit, and a reduction in the advance tax rate from 2.5% to 1%.
The Poultry Association requested the removal of sales tax on chicken, pointing out the inconsistency since other meats are tax-exempt. They argued that extensive taxation on poultry feed makes farming riskier.
Dairy representatives sought a sales tax reduction on products like milk, from 18% to 5%, aligning with international norms. In response, the FBR Chairman asked for proposals to address the potential revenue gap.
The Fruit Juices Council called for lowering the Federal Excise Duty from 20% to 15%, citing a significant sales drop due to the current tax policy.
The Pakistan Builders and Developers Association proposed eliminating advance income tax on property transactions and reinstating a simplified tax system based on covered area, while calling for the repeal of Section 7E.
The Constructors Association of Pakistan demanded a reduction in withholding tax from 8% to 1.5% or 2% and the removal of “withholding agent” obligations for contractors.
The Steel Melters Association highlighted tax evasion in the steel sector, estimating losses of Rs. 70-80 billion annually. They pointed to rampant smuggling and unregistered steel scrap circulation and urged an end to FBR’s price-fixing practices.
The Gem and Jewelry Association requested import duty exemptions on technology and asset declarations in gold rather than cash.
Senator Mandviwalla recognized the detailed feedback from stakeholders and promised to consider their concerns in the budget process. The committee aims to create a business-friendly environment, ensuring transparency, accountability, and sustainable revenue generation. The meeting included participation from various associations and key senators.