KARACHI: The Pakistan Yarn Merchants Association (PYMA) has proposed cuts in customs duty, sales tax, withholding income tax and abolish regulatory duty, and additional customs duty on yarn in the new Federal Budget 2022/23, a statement said.

PYMA Chairman Saqib Naseem, Sindh Balochistan Region Vice Chairman Muhammad Junaid Teli, Standing Committee on Budget, Taxation Chairman Farhan Ashrafi said that the 13 per cent customs duty has been imposed on polyester pre-oriented yarn (POY).

They suggested that without any additional customs duty, it should be 7 per cent through SRO or tariff.

“The product POY (5402-4600) is a medium yarn for manufacturing polyester textured yarn (DTY) which is considered a completely separate industry in India, China, Vietnam and Bangladesh’,” they said, adding that the polymerisation plants require huge capital whereas texturising units can be easily set up through the Small and Medium Enterprises (SME) sector.

According to PYMA’s budget proposals, 11 per cent customs duty is levied on polyester fully drawn yarn (5402-4700), while in the new budget, PYMA has proposed to reduce the customs duty to 7 per cent through SRO or tariff.

Similarly, the customs duty on polyester texturised yarn should be reduced from 11 per cent to 9 per cent as fabrics made from artificial, synthetic yarns are used by the common man, the PYMA office bearers said.

The association termed the 2 per cent regulatory duty on polyester spin yarn as unfair and proposed to abolish it as zero per cent which is the basic raw material of weaving and knitting industry, further suggesting maintaining the current 17 per cent sales tax rate.

The PYMA also called for eliminating the discrimination between commercial importers and manufacturers, saying that currently the withholding income tax on commercial importers of yarn is 2 per cent while on manufacturers under SRO 1125 is only 1 per cent.

The PYMA officials proposed 1 per cent withholding income tax on both, while urging that the withholding tax on yarn traders should be reduced from 0.5 per cent to 0.25 per cent.

Saqib Naseem, Junaid Teli and Farhan Ashrafi, in the budget proposals, were of the opinion that due to the continuous business recession and unstable economic situation, yarn traders are not ready to register with the Federal Board of Revenue (FBR), as a result, the national exchequer may face significant losses in terms of revenue.

In the budget proposal, the PYMA pointed out the anomaly regarding the turnover tax, saying that it was agreed with the top FBR officials that it would remain at 0.1 per cent, suggesting that the turnover tax be kept at 0.1 per cent.

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