Pakistan: Fast-Moving Consumer Goods sector faces tax strain
Wire desk byline Sourced from Xinhua, Dawn, Arab News, Anadolu and Minute Mirror. Translated and abridged by the GSRRA Desk.
The withholding and advance tax system of the Federal Board of Revenue (FBR) is creating difficulties and administrative complications for the Fast-Moving Consumer Goods (FMCGs) sector, particularly the food industry, said Hyderabad SITE Association of Trade and Industry Chairman Zubair Ghangra.
In a statement on Tuesday, he said that this system was practically creating unnecessary pressure on various stages of the supply chain, which was affecting the pace of industrial activities.
He said that a large part of the retail market in Pakistan still consisted of unregistered shopkeepers, due to which the tax burden was mainly shifted to manufacturers, wholesalers, and distributors. As a result of this imbalance, he said, not only has the cost of doing business increased, but disproportionate pressure has been increasing on the organised and registered sector.
He said that this situation affects the cash flow of FMCG and the food industry, while documentary compliance requirements have increased to an unnecessary extent.
He said that ease of doing business was being affected and that additional pressure was being placed on low-margin items, which ultimately affected both consumers and the economy.
He added that the system was indirectly strengthening the informal economy, as unregistered market players remained outside the tax net, while the burden fell on registered entities. It was not possible to establish an effective and fair tax system without removing this imbalance.
Reference Link:- https://www.dawn.com/news/2003377
Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…
