KARACHI: Pakistan Yarn Merchants Association (PYMA) has proposed cut in duty and taxes on yarn in the forthcoming budget 2022/2023.
The association demanded reduction in Customs Duty, Sales Tax, withholding income tax and abolishing Regulatory Duty and Additional Customs Duty on yarn in the next Federal Budget 2022/2023.
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In the budget proposals, PYMA Chairman Saqib Naseem, Vice Chairman Sindh Balochistan Region, Muhammad Junaid Teli, Chairman Standing Committee on Budget, Taxation Farhan Ashrafi, said that 13 per cent customs duty has been imposed on Polyester Pre-Oriented yarn (POY), we suggested that without any additional customs duty, it should be 7 per cent through SRO or tariff.
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“The product POY (5402-4600) is a medium yarn for manufacturing polyester textured yarn (DTY) which is considered a completely separate industry in India, China, Vietnam and Bangladesh,” they said, adding that polymerization plants require huge capital whereas texturizing units can be easily set up through SME sector. In addition, the industry can export DTY to international markets.
According to PYMA’s budget proposals, 11 per cent customs duty is levied on Polyester Fully Drawn Yarn (5402-4700), while in the new budget, PYMA has proposed to reduce the customs duty to 7 per cent through SRO or tariff.
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Similarly, customs duty on Polyester Texturized Yarn should be reduced from 11 per cent to 9 per cent as fabrics made from artificial, synthetic yarns are used by the common man.
PYMA termed the 2 per cent regulatory duty on polyester spin yarn as unfair and proposed to abolish it as zero percent which is the basic raw material of weaving and knitting industry. Therefore, there is no justification for imposing regulatory duty on it. They suggested maintaining the current 17 per cent sales tax rate which is adjustable.
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PYMA also called for eliminating the discrimination between commercial importers and manufacturers, and said currently withholding income tax on commercial importers of Yarn is 2 per cent while on manufacturers under SRO 1125 is only 1 per cent. Therefore, we proposed 1 per cent withholding income tax on both. Similarly, withholding tax on yarn traders should be reduced from 0.5 per cent to 0.25 per cent
Saqib Naseem, Junaid Teli and Farhan Ashrafi, in the budget proposals, were of the opinion that due to continuous business recession and unstable economic situation, yarn traders are not ready for it, and they are reluctant to register with FBR. As a result, the national exchequer may face significant losses in terms of revenue.
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In the budget proposal, PYMA pointed out the anomaly regarding the turnover tax, saying that it was agreed with top FBR officials that it would remain at 0.1 per cent, so it was suggested that the turnover tax be kept at 0.1 per cent.
