KARACHI: The Pakistan Yarn Merchants Association (PYMA) has rejected four per cent withholding tax imposed on textile value chain.
In a statement issued on Tuesday, PYMA Chairman Muhammad Saqib Goodluck said that in a meeting with the Federal Board of Revenue (FBR), it was agreed that only 1pc withholding tax would be imposed on yarn.
But unfortunately, the FBR has imposed 4pc tax on the entire value chain including the doubling, twisting, knitting and weaving sectors, he lamented.
Goodluck said that 4pc tax will prove disastrous for the entire textile value chain since advance income tax could not be collected on total amount of every receipt.
He went on to add that deduction of 4pc on invoice will increase pressure on ginners to reduce cost of cotton. In fact, they must be responsible for ginning charges which is 35pc of ginned cotton.
