LAHORE - The Lahore Chamber of Commerce and Industry (LCCI) on Friday welcomed FBR decision to withdraw Capacity Tax on beverage companies.
In statement issued here, LCCI President Engineer Sohail Lashari said that the FBR decision would enable the small and medium players in the beverage industry to continue with their businesses as the capacity tax was hitting hard the low-profile international brands and local brands.
The FBR is expected to take away the new tax regime of ‘capacity tax’ before January, 2014 by rescinding rules relating to the capacity tax. Following rescinding the Capacity Tax Rules, the FBR will restore old sales tax and FED collection mechanism for the beverage manufacturers to check shortfall in the said sector.
It is high time that the government should realize not to impose any such taxes that do not favour the exchequer and the industry at large because that burden of shortfall would ultimately have to be shared by other taxpayers.
It is recommended that before imposition of any such tax, the government should seek recommendation and input from all of the stakeholders of that industry.
Before the imposition of capacity tax, the Lahore Chamber of Commerce and Industry had raised its concern that system of tax would not bear fruit for the government. Competition Commission of Pakistan also vide its policy note dated September 02, 2013 in which the government was recommend to withdraw the capacity tax. This decision should have come much earlier and saved the government was recommended loosing billions.