KARACHI: Chairman PCDMA & former director of Karachi Stock Exchange, Amin Yousuf Balgamwala has expressed serious concerns over the inclusion of certain industrial raw materials in the category of finished goods in the budget 2020-21.
Amin Yousuf Balgamwala demanded re-entry of industrial raw materials in part two by maintaining the previous rate of income tax.
In letters sent to Abdul Razzaq Dawood, Advisor to the Prime Minister on Trade and Investment, and to the FBR’s Anomaly Committee, chaired by Ashfaq Tola, chairman PCDMA said that there are three parts of Schedule 12 of the Finance Bill 2020.
“Part one contains capital goods, Part two contains raw materials and Part three contains finished goods,” he said.
Surprisingly, the government has removed several raw materials of chemicals and dyes from Part two and inclusion in part three, which is for finished goods. The income tax rate in Part three is 5.5 percent, while in Part one it is 1 percent and in Part two it is 2 percent, he added.
According to him, the raw material of chemicals and dyes was earlier listed in part two but adding many raw materials in part three would result in a tax on the raw material in terms of finished goods. “The rate of income tax on imported goods has been increased by 3.5 percent which will exclude to commercial importers from the import business”, he pointed out.
He feared that if the previous status of raw material not restored then it will lead to a shortage of industrial raw materials and also disrupt the production activities which will ruin the exports.
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