LAHORE (March 10 2010): The Pakistan Industrial and Traders Associations Front (PIAF) has urged the Chairman Federal Board of Revenue to ensure the release of Sales Tax Refund at the earliest as exporters are facing multiple problems because of liquidity crunch.

The PIAF Chairman Irfan Qaiser Sheikh, in a statement issued here on Tuesday said that the undue and unjustified delay in the release of Sales tax Refund was not only earning a bad name for the government but was also hitting the industrial productivity hard. He said that if the Federal Board of Revenue wanted an early economic turnaround, it would have to eliminate the culture routine bureaucratic hurdles and red tapism.

Sheikh said that delay in sales tax refund has halted the business activities as huge capital of exporters has been frozen but no action so far been taken by the FBR officials. He said that FBR non-friendly policies were coming in the way of widening the tax net. He stressed the need to bring more sectors in tax net as 85 percent of total revenue was being collected from just 1600 companies. He said, it would help to increase tax to GDP ratio from existing 8.8 percent to 15 percent.

He said that as compare to other countries of region, tax to GDP ratio in Pakistan was at the lowest level. He said that tax to GDP ratio in India was more than 15 percent, while in Bangladesh it was 14.75 percent. He also said that increase in electricity prices was bound to put more burdens on industrial sector, which was already passing through a very critical period and facing multiple internal and external challenges.

Copyright Business Recorder, 2010