FAISALABAD - Famous industrialist, chairman Pakistan Edible Oil Refiners Association (PEORA) and former president Faisalabad Chamber of commerce and industry Mian Muhammad Hanif has proposed to the federal government some suggestions for the upcoming federal budget 2011-12 that levy withholding Tax on Imported Edible Oils in the PTR Mode. The structure of income tax applicable on Edible Oil and Vegetable Ghee industries before 30th June 2009 would be as on import of raw material at 2% us 148(8) and as final discharge of liability. Mian Muhammad Hanif proposed that where as it has been converted in Finance Bill 2009 as on import of raw material @ 3% u.s. 148 (8) and as minimum tax liability instead of final discharge. Hanif further added that the PTR system was most suitable as it avoids interaction between assesses and the tax collecting authority. Further the local / foreign investment was brought in this industry on the Government policy of PTR. He said that while decision requested, with holding Tax on edible oils may be converted to PTR mode as Final Discharge Liability. Second main proposal No. 2 is government increased the Income tax (WHT) from 1% to 2 % on the purchase of locally produced edible oils. He apprehended. He reminded that the Government in the Federal Budget 2008-09, Second Schedule Clause (38)(b)(ii) Finance Bill had increased the Income Tax from 1% to 2% on purchase of locally produced Edible Oils. The Clause spells out as seeks to enhance the reduced rate of tax from 1% to 2% on the purchase of locally produced Edible Oils by the manufacturers of Cooking Oil or Vegetable Ghee. He said. Mian Hanif, as chairman Pakistan Edible Oil Refiners Association, proposed that the Edible Oil Refineries have been established in Pakistan to refine Crude Palm Oil (CPO). These Refineries are in fact playing role of Value Added Industry. Our Members import Crude Palm Oil (CPO) from Malaysia / Indonesia. He maintained that the anomaly we are facing is that the Crude Palm Oil (CPO) we process to refine and get Refined Palm Oil, which the Authorities are considering as Locally Produced Oil whereas we believe that same should be considered as the Refined Processed Oil. He added that this anomaly has created great obstacle for our Refining Industry to sell Refined Palm Oil since the buyers have to pay 2% Advance Income Tax whereas no such tax is payable by buyers if bought from Industrial / Commercial Importers. He suspected that if the industrial and commercial importers sell Refined Palm Oil in the local market, buyers are not obliged to pay the Advance Income Tax of 2%. This has created a great anomaly and has proved to be detrimental to the interest of Edible Oil Refineries. He requested that in view of above, we humbly request to review the interpretation of locally produced oil. The Advance Income Tax of 2% applicable on buyers for buying Refined Palm Oil from the local Edible Oil Refineries should either be with drawn or also be applicable on the sale of imported RBD Palm Oil. The commercial/industrial importers and the refiners may be treated at par. Mian Hanif said. In his third important proposal he discussed concessionary duty of 10% on palm fatty acid and distillate (PFAD) allowed to the soap industry. He reminded that the Government in the Federal Budget 2008-09 has allowed the concessionary Import Duty of only 10% on Palm Fatty Acid Distillate (PFAD) as raw material to the Soap. He said that manufacturing Industry vides SRO No. 564(1)/2008 dated June 11, 2008. This has proved detrimental for the local Edible Oil Refining Industry. He further proposed that presently 10 refineries are in operation with installed capacity of 5,500 MT/day and can refine 1.4 Million Tons of CPO. In the refining process we get 94 % RBD Palm oil, 5 % PFAD and I % are the losses. Therefore, local production of PFAD can be 70,000 MT but the industry is running at 50 % of installed capacity, as the soap industry/oleo-chemical industries have been given concessionary duty to import PFAD/Palm Acid Oil, Sludge Oil and palm stearin, which are all used for soap manufacturing. This has unnecessarily resulted in the loss of foreign exchange as we have enough local production to meet the local demand of the soap industry. Mian replied a question. Chairman Pakistan Edible Oil Refiners Association in his budget suggestions demanded that in view of above, we request your good self to review the Duty Structure of Palm Fatty Acid Distillate (PFAD), acid oil, sludge oil and stearin, and increase the Import Duty to 25% to protect the local Refineries. We as an Association assure you that we can easily meet the demand of local Soap Manufacturers who are unnecessarily wasting Countrys foreign exchange by Importing PFAD and other acid oils and the quality of locally produced PFAD is much better than the imported one. He maintained his suggestions. He streamlined that the major decision requested is being the Concessionary duty on PFAD, Palm Acid Oil, sludge Oil and Palm Stearin may please be withdrawn and the import duty may please be increased to 25% to save the domestic refining industry. He concluded