Pakistan’s Entire Export Sector Combined is Paying Less Tax Than Cigarette Companies

Pakistan’s export sector combined is paying less tax than cigarette companies in the country. The government has given many incentives to the export sector but the foreign exchange earnings have not increased to the desired level. Traders and importers are under-invoicing by billions of dollars.

This was stated by Federal Minister of Finance Miftha Ismail while addressing the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Pakistan Textile Forum in Karachi on Saturday.

He told the industrialists and traders that at the Federal level, the financial space is very narrow and from the first day of the fiscal year, the government has been trading in the negative and has been forced to borrow from banks. There are many people who are needier than the business community, the government must take care of poorest of the poor first, he said.

“The government needs funds to run its business but all of the tax collected is used up for debt servicing. Tax collection is very low. The export sector combined is paying only Rs.30 to 31 billion in income taxes. This is less than the tax paid by the cigarette companies alone.” Miftah Ismail informed.


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Responding to the demand of the textile sector to provide special incentives on exports, the Finance Minister asked despite all the export incentives and packages how much additional foreign exchange have they earned for Pakistan?

“Pakistan’s exports are growing and imports are slowing down, this is a healthy trend for narrowing the trade deficit. In March, Pakistan’s exports grew 24 percent and in April the growth was at 18 percent. Similarly, the import growth was down to 6 and 2 percent in the same months. “ the minister told.

Talking at FPCCI, Miftah Ismail rejected the demand of commercial traders to make 6 percent tax as full and final. Minister said that import customs data of China and United Arab Emirates (UAE) shows $6.5 billion dollar less value in imports proceeds.

“Customs data of China shows that importers showed $4 billion less value and similarly $2.5 billion under invoicing from UAE.  This is a huge loss to the exchequer. Pakistan demands full custom data of importers from China but they’re reluctant to provide the data.” the minister told.

He also rejected a demand of the Auto sector to waive the condition of having a valid NTN on purchasing a new car.

“Roads are made with the taxpayers’ money. If someone wishes to own a car, they must pay the taxes. Otherwise, they should stay a pedestrian.” Miftha responded.

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