Wednesday Jan 06, 2021
Former Federal Board of Revenue chairperson Shabbar Zaidi believes it is "absurd" to restore the zero rating of Pakistan's export sector in this age of technology.
Recently, there have been reports of a heated debate in government spheres where a side is saying the small exporters face difficulty buying inputs by paying the sales tax first and then applying for refunds.
The ones in the favour are reportedly pushing the FBR to restore the zero rating regime for five exporting sectors.
But Zaidi thinks this is a bad idea.
He said he fought and won the war for abolition of zero rating for export sector.
"Reversing it will be regressive. If this is done then we should forget about any tax system in Pakistan. Improve refund system," he wrote on Twitter.
During most of the tenures of the previous regimes, exporters used to pay taxes and claimed refunds after exports. The last government had introduced zero-rating in the final leg of its tenure, but it was reversed by the PTI government on the advice of Zaidi.
Exporters protested strongly but Zaidi’s stance was that though the sales of textile products locally has crossed over Rs1,500 billion, the sales tax paid on local sales was pathetically low by a few billion.