LAHORE - Pakistan Sugar Mills Association Punjab zone chairman Javed Kayani has announced that sugar industry is ready to work hand-in-hand with the FBR to raise tax-to-GDP ratio, as it is a prerequisite to economic revival of the country.
While talking to journalists here on Friday, he observed that sugar sector which is already contributing Rs18 billion in national exchequer annually, besides earning a foreign exchange of $1 billion despite restrictions on sugar export, is ready to join hands with the FBR to enhance tax net, playing its role to unearth new taxpayers, but tax department should also consult the real stakeholders before formulating tax policies.
‘FBR will have to sit with the industry and consult the real stakeholders to understand the complexities and difficulties of the industry, instead of relying on fake and bogus reports and fabricated sources’.
Chairman PSMA Punjab observed that FBR, for the last two years, has been invoking the provision of Section 40-B of the Sales Tax Act, which empowers the Inland Revenue officer to monitor production, sale of goods and stocks at the sugar mills. “FBR staff is provided with all relevant data and material every minute as they remain deputed at the premises of the mills during the course of crushing season. The production takes place only during the availability of sugarcane therefore all relevant stocks and statistics are available with FBR for purposes of collection of taxes.”
The Rs.350 billion’s sugar industry, besides providing livelihood to hundreds of thousands of villagers directly and indirectly mostly in backward areas, contribute over Rs.200 billion annually in rural economy by purchasing sugarcane from growers. The same sector also makes investment of up to Rs15 billion annually on technology upgradation, machinery update and co-generation, he added.
Setting aside the wrong impression of low tax collection from the industry, he said that federal excise duty on local sale of sugar was exempted last year against exported quantity of 1.2 million tons, causing low tax revenue from the sector. But due to incentives the industry also earned precious foreign exchange of over $1 billion for the country. Therefore FBR should appreciate that country earned a sizeable foreign exchange and avoid dependence on unrealistic reports of so called experts, who lived in absolute isolation of industry.
Javed Kayani elaborated that most of sugar companies are listed on the stock exchange and follow code of corporate governance and contribute significantly to the national exchequer, which can be verified from the tax records.