LAHORE - The Pakistan Flour Mills Association has asked the government to remove 7 per cent sales tax on bran otherwise the mills will stop washing of wheat from Friday (today). And if implementation of this unjust tax on flour industry continues, the industry will halt grinding of flour from tomorrow (Saturday). Besides, the mills will also stop supplying flour to market from Saturday.
The leaders of flour mills said that mills profit margin is very low and price is fixed by the provincial government. They said that due to imposition of 7 per cent sales tax on bran, the cost of mills will be increased by Rs15 per 20kg bag of flour.
Dr Bilal Sofi, former PFMA chairman, claimed that not a single country imposes such taxes on food items. He said strike in this regard is on from tomorrow onwards and hopefully that matter should be resolved immediately to continue flour supplies.
Meanwhile, as the government has agreed to reduce withholding tax to 0.3 per cent from 0.6 per cent on banking transactions, the PFMA has rejected this decision of the government, as this relaxation is temporarily for three months.
Dr Bilal Sufi, who is also chairman Pakistan Flour Millers Forum, has rejected the decision of 0.3% withholding tax on banking transactions. He said business community will face immense problems due to this unwise decision. It should be removed altogether otherwise economic activity in the country is going to slow down.
Regarding 0.3 per cent tax on banking transaction, Dr Bilal Sufi said that after the implementation of this tax the flour industry’s dealing with banks is almost stopped as the whole business is done by non-registered sector in the country.
He said that the representatives of traders and industry have opposed the government’s decision of taxing all the banking transactions as it may lead to promote the culture of cash dealing, usage of non-banking channels besides hitting hard the genuine businesses. The government should have promoted transactions through banking channels but such steps will force them to pay in cash or use other non-banking channels.
He said if the government thinks that it would increase its revenue by this way, it should broaden its tax net and bring those into it who are still not paying taxes instead of screwing those who are already contributing to the national exchequer.
By the virtue of this tax, the FBR has put the burden of netting non-filers on registered persons, which is unlikely to bring the desired results. It will only add to the cost of doing business that would be passed on to the consumers.