KARACHI: The Pakistan Yarn Merchants Association (PYMA) has urgently called on the Federal Board of Revenue (FBR) to issue a clear clarification regarding the applicable turnover income tax rate for yarn merchants, following what it describes as unjustified harassment by tax authorities.
In a strongly worded statement issued on Thursday, PYMA Chairman Muhammad Saqib Goodluck criticized the FBR for issuing tax notices to cotton yarn traders, accusing officials of misinterpreting SRO 333(I)/2011. According to Goodluck, this statutory regulatory order explicitly sets the turnover tax for yarn merchants at 0.1 percent. However, contrary to the provisions, tax authorities from Inland Revenue have been demanding turnover tax at an inflated rate of 1 percent.
He revealed that more than 60 percent of yarn merchants have been served with such notices, causing widespread concern across the yarn trading community. “If the SRO clearly prescribes a 0.1 percent turnover tax for yarn merchants, then there is absolutely no justification for the FBR to demand a higher rate or harass genuine merchants,” he stated.
PYMA has taken up the matter formally with the FBR. A delegation of the association recently met with Dr. Ateeq Sarwar, Member Inland Revenue Policy at FBR. During the meeting, the PYMA Sindh and Balochistan Zone Chairman stated that Dr. Sarwar acknowledged the merchants’ concerns and admitted that the 1 percent demand was not in accordance with the current policy. He assured the delegation that a formal clarification would be included in the upcoming federal budget to eliminate ambiguity.
Despite the assurance, Saqib Goodluck emphasized that the damage is already being done, with yarn merchants across the country facing undue pressure. He urged the FBR to not only expedite the issuance of a clear and formal clarification but also immediately withdraw all tax notices issued to yarn merchants under the incorrect interpretation.
“Until the matter is resolved through official clarification, the FBR must halt all actions that unfairly target yarn merchants. Our members operate in compliance with the law, and any deviation from policy causes serious disruption to trade,” he concluded.
PYMA reiterated its demand for fair treatment and legal clarity to protect the interests of yarn merchants and ensure a stable trading environment.