Processing Mills strike against 17% sales tax

LAHORE/FAISALABAD: Imposing a 17% sales tax on five zero-rated sectors and the government’s incompetence to register the trade sector with tax net, results in all 600 processing units in four major cities closing down as a protest.

“We finally closed our all member textile processing units situated in Faisalabad, Karachi, Lahore, and Gujranwala. Our 600 member mills include 240 in Faisalabad and around 225 in Karachi,” Chairman of All Pakistan Textile Processing Mills Association, Habib Gujjar stated. Though the owners are yet to cut off hundreds of thousands of workers from the employment, they’ve given a 10-day deadline if the government chooses to ignore their demands.

Since the APTMA has closed all of the member units across the country, the All Pakistan Textile Sizing Association has too stepped up and announced to shut 100 member mills in Faisalabad, Jhang, Toba Tek Singh and Hafizabad from Thursday.

“We have also decided to join hands with the APTMA since we are facing similar issues. Our main issue is the trade that is still unregistered. So the government must first get the entire chain completed by bringing them into the tax net. The trade sector is not ready to buy from us on the condition of CNIC provision,” APTSA’s patron Shakeel Ansari stated. “Everything is going down fast. But the government is not bothered. It is strange to know that what this government wants to do with us,” according to him.

Mr. Gujjar, the APTMA chairman desired that the government takes the body onboard while taking the important measures. “We are with the government. But it is heading towards creating anarchy in the industry. Why it is doing [this], it is really astonishing,” Meanwhile speaking to journalists in Faisalabad, APTSA chief Mr Ansari said the government imposed 17 percent sales tax on the five zero-rated sectors by withdrawing the SRO 1125, as concerns were added about the dollar prices rising affecting the imports of textile chemicals and parts, as well attaching the prices of gas and electricity with dollar.

They demanded that the government restores the SRO 1125, as noncompliance will lead to joblessness of thousands which would further corrupt the economy.

As per the counsel for the Looms Owner Association, Waheed Khaliq, the government’s decision came as a surprise, even though they had suggested the government to fix the sales tax for every sector but the government did not comply. He said they were paying sales tax on the purchase of yarn, but the buyers were not registered with the FBR. “We have received notices along with electricity bills to get registered with the income tax department,” he stated.

Foreign Minister Shah Mehmood Qureshi, meanwhile in Multan, said that he would take up the issue of imposed taxes on small traders in the cabinet on Tuesday (today).

“We are aware of the prevailing condition of traders and know that they are not happy and one thing is also important that the economy could not be strengthened without traders. In my opinion, a panel of economists be devised to review the budget while keeping in view the traders’ concerns and in this regard, the traders should also adopt the way of negotiations,” said the foreign minister as he addressed the All Pakistan Traders Convention.

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