APCMA expresses reservations on various tax measures announced in federal budget 15-16

All Pakistan Cement Manufacturers’ Association has expressed reservations on various tax measures announced in federal budget 15~16 that would hurt investors’ sentiments in general and will particularly burden cement consumers in the country. Chairman APCMA Muhammad Ali Tabba has requested the Federal Finance Minister, Ishaq Dar to revisit some fiscal measures which would definitely result in increasing the cost of doing business in the country and are against norms of taxation.

He pointed out that taxpayers having taxable income of Rs 500 million or more, will now be liable to pay 3 percent super tax which is discriminatory in nature. He further regretted that super tax will also be charged on imputed income i.e. on exports also whereby exports are subject to final tax regime at the rate of 1 percent.

He further added that as per amendments introduced in Section 8 of the Sales Tax Act – 1990, services, for which input tax is barred under respective provincial tax laws, is no longer adjustable against Federal output tax liability.

There is no rationale of relating the admissibility of input tax on genuine services rendered in relation to supply of goods under the Federal Sales tax law. Further input tax on goods and services to be identified by the Federal Board of Revenue would be inadmissible for the buyer if the supplier has not declared the output for the same in the return. There is no rationale for relating these two different aspects with the admissibility of input tax.

Protesting the increase of import duty from 1% to 5% on coal he said that while the cement manufacturers are making efforts to reduce the cost of production in order to compete on global level, yet another measure in the federal budget will increase the cost of production since fuel constitutes more than 50% in overall production cost and cement manufacturers will have no choice but to pass on this additional burden to the consumers.

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