KCCI demands suspension in sales tax on services collection for six months

KCCI demands suspension in sales tax on services collection for six months

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has demanded the Sindh government to suspend the sales tax collection by Sindh Revenue Board (SRB) for six months.

KCCI President Agha Shahab Ahmed Khan in a statement on Saturday urged the Chief Minister Sindh to devise some kind of an effective mechanism for providing immediate relief to the perturbed businessmen and industrialists by directing Sindh Revenue Board (SRB) to discontinue collection of all types of taxes including Services Tax and other levies.

The same has been done by the Punjab Government as Chief Minister Punjab Sardar Usman Buzdar recently waived off provincial taxes of Rs18 billion in the wake of prevailing economic situation due to coronavirus, Agha Shahab mentioned in a letter sent to Chief Minister Sindh Syed Murad Ali Shah.

President KCCI underscored that SRB must stop collecting taxes during the next four to six months and these should only resume when the situation improves after the said period.

He said that the business & industrial community, which is already providing cash and food to the needy Karachiites on humanitarian grounds, would try its best to somehow sustain the entire burden of wages and salaries payable for this month only but they will not be able to do so next month.

Hence, a Special Relief Package has to be announced in which the entire cost of salaries/ wages must be borne by the government which would certainly provide relief to industries but if the government is not in a position to do so, a mechanism has to be adopted for a period of at least two to three months in which the aggregate amount of salaries payable by each and every industry should be fragmented into three equal portions, of which the first portion should be paid by the relevant industrialist and second portion should be contributed by the government while the last portion has to be borne by the laborers.

“This Special Relief Package is the need of the hour which would certainly enable the private sector to deal with this uncalled for stress on their balance sheets, avoid lay-offs and rescue many industrial units from becoming sick or bankrupt”, he added.

Agha Shahab further said, “The business and industrial community fully supports all the initiatives taken by the government to completely eradicate COVID-19 from Pakistan but at the same time, we are equally cognizant and too concerned about the hardships being faced by hundreds and thousands of poor laborers, daily-wage earners and their families who must be going through awful circumstances. Hence, it is high time that the government extends the desperately needed helping hand to the business & industrial community with a view to reduce the excessive burden on the shoulders of industries and enable them to survive in the ongoing extremely challenging environment, besides ensuring implementation of your (Chief Minister’s) announcement to waive off electricity bills for consumers.”

While appreciating all the efforts being made by the Sindh government to prevent and minimize the damages caused by the outbreak of Coronavirus pandemic, Agha Shahab noted that the Sindh government took many tough but praise worthy decisions to save the precious lives and a complete lockdown persists since March 23, 2020. Consequently, the overall industrial production in seven industrial town zones suffered badly and around 20 to 40 percent of the revenue was being generated by those industries engaged in manufacturing food items only while all other non-food industries remain completely closed due to lock down and unavailability of workers, laborers and daily-wage earners who remain confined to their homes so that further spread of COVID-19 could be prevented.

He was of the opinion that the ongoing lockdown has led to creating serious crises for thousands of industries due to income erosion and additional cost of doing business as they have to pay salaries and arrange food stuff and rations etc. for their idle workers and daily wage earners. “In this regard, KCCI has been receiving several appeals from different sectors and industrialists as they find the emerging situation extremely difficult which poses threat to their survival and they may not be able to stay afloat for long because of the sluggish production and additional cost of paying salaries/ wages to their unproductive workforce”, he added.