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A half day meeting of the Sub-Committee of the National Assembly’s Standing Committee on Finance and Revenue was chaired by Ms. Shahnaz Wazir Ali, MNA and Special Advisor to the Prime Minister on 7th December 2010 in FBR. The meeting was attended by two other MNAs namely Ms. Kashmala Tariq and Mr. Rashid Godil, Mr. Gohar Ejaz, Chairman APTMA, Mr. Zubair Motiwala, Chairman CAPTA, representatives of several textile sector associations, Chairman FBR and FBR officers.
Several issues relating to the five zero-rated sectors (Textile, leather, carpets, surgical goods and sports) and RGST were discussed extensively. The associations presented their point of view and requested that zero-rating be continued under the existing sales tax regime since removing zero-rating would lead to liquidity issues for these sectors. They requested that the intermediatary stages be not taxed and some other mechanism may be devised to collect taxes on the domestic sales of these sectors preferably at the retail stage.
There was a consensus that the exports of these five sectors should remain zero-rated whereas the domestic sales need to be taxed. The Sub-committee appreciated the concerns of the Textile associations and the need to facilitate the sector since it represented a major share of Pakistan’s exports.
The discussions of the sub-Committee with the representatives of these sectors shall continue in the next meeting of the sub-Committee scheduled on 11th December, 2010. Ms. Shahnaz Wazir Ali requested FBR and the representatives of the associations to present definite proposals on how the exports of these sectors could be facilitated and the local consumption brought into the tax net in the next meeting to help the Sub-committee firm up its views.