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Press Release

PCMEA threatens to shut down businesses if brought

PCMEA threatens to shut down businesses if brought under normal tax regime

A delegation from the Pakistan Carpet Manufacturesrs and Exporters Association (PCMEA) during a visit to the Lahore Chamber of Commerce, expressed their concerns to the LCCI President Kashif Anwar regarding the recent budget proposals. They stated that if the export sector is included in the normal tax regime, exporters will be forced to shut down their businesses. The delegation was led by former President of the Lahore Chamber, Shahid Hassan Sheikh, and included executive committee members Mian Atique Rehman, Raja Hassan Akhtar, Abdul Latif Malik, Former chairman PCMEA, Usman Ashraf, Senior vice Chairman, Ijaz ur Rehman, Major Akhtar Nazir, Tahir Aslam, Iftikhar Tahir, Faisal  Saeed among others.

The delegation stated that instead of providing facilities to the export sector, the government has increased their difficulties. Bringing the export sector into the normal tax regime will reduce revenues and decrease dollar inflow into the country, which will further increase inflation.

They warned that exporters might relocate to countries like the UAE in special economic zones where all the policies are business-friendly. They demanded the formation of export-friendly policies and the announcement of at least a five-year policy for exports, which should not be affected by future budgets. The government facilities for exporters, such as financing, moved from 3 percent to 19 percent, which is not viable. Additionally, all the facilities like DLTL and incremental DLTL were withdrawn, and the previous four years' amount was still unpaid. Now, the facility of fixed tax will be withdrawn, which is totally unacceptable and unfair.

They also called for a review of agreements with IPPs to reduce electricity costs in the country, a reduction in gas prices, and the restoration of other subsidies for exports.

LCCI President, Kashif Anwar, noted that in the past three years, the country has witnessed massive devaluation, and with the rise in energy costs, input costs have also gone up. Despite these challenges, due to governmental policies and the hard work of exporters, Pakistan's exports have reached 30 billion dollars. However, removing the facilities provided to exports now will lead to a decrease in export volume. LCCI President expressed hope that this issue would be resolved soon. Kashif Anwar clarified that they are not against taxing exporters, but the longstanding tax regime on exports should not be changed overnight. He pointed out that exporters were previously subject to a 1 percent final tax on turnover, which has now been included in the normal tax regime, affecting exports. He emphasized the need for a complete consultation process before implementing such laws.