According to Pakistan’s “Business Record” report, the Federal Board of Revenue (FBR) of Pakistan recently issued a report indicating that although textile companies have a high contribution rate to Pakistan’s economy, the income tax they have paid in recent years has had a lower impact on the entire country. is trivial.
Data shows that in the 2004-2005 fiscal year, Pakistani textile companies paid a total of 13.8 billion rupees (approximately 231 million U.S. dollars) in taxes, while the tax refund amount during the same period was as high as 41.1 billion rupees (approximately 688 million U.S. dollars). The national fiscal net loss was actually 27.3 billion rupees (approximately 457 million US dollars). There was improvement in the 2008-2009 fiscal year, and the net loss was reduced to 6.5 billion rupees (approximately 80.85 million US dollars), but the government is still overwhelmed by this.
During the 2007-2008 fiscal year, Pakistani spinning enterprises paid only 1.5 billion rupees (approximately 22.69 million U.S. dollars) in income tax, a decrease of 1 billion rupees (approximately 15.13 million U.S. dollars) compared with the previous year. Among its 1,782 income tax filing companies, except for 268 companies (accounting for 15% of the total number of companies) that reported operating income, 1,155 companies (accounting for 65%) had no operating income, and the other 359 companies (accounting for 20%) had operating losses.
Experts believe that the main reasons for the above phenomenon are: first, the lack of corporate auditing systems implemented in developed countries, resulting in textile companies underreporting or concealing their income; second, Pakistan’s current income tax reporting system is defective , the “monthly situation report” prepared by local tax authorities only includes macro indicators such as withholding income tax collection and active payment, but does not reflect the income tax collection situation of the entire textile industry in a timely manner; thirdly, the current zero-tax system in the textile field (import and sales) ) has not achieved the planned target, and the scale of corporate tax refunds is still too large.
However, the All Pakistan Textile Manufacturers Association (APTMA) believes that the current phenomenon of Pakistani textile companies generally not making profits or losing money is caused by factors such as global and domestic economic recession, energy crisis, depreciation of the rupee, and poor national security situation.
Experts suggest that the government cancel the current zero-tax system in the textile field as soon as possible and introduce a new effective tax refund settlement mechanism to prevent further losses to the national finance.
