ISLAMABAD: The Federal Board of Revenue (FBR) has withdrawn 1 percent withholding tax on yarn business and manufacturers will instead pay 0.1 percent turnover tax.
The government has now clarified that both are different taxes and yarn manufacturers would not pay 1 percent withholding tax, said Karachi Chamber of Commerce and Industry (KCCI) President Junaid Esmail Makda while talking to media.
Yarn is a basic raw material for almost every textile product as it is used in sewing, crocheting, knitting, weaving, embroidery,
Makda pointed out that under Section 45A of Part IV of the Income Tax Ordinance, sales, supplies and services made by traders of yarn would not be subject to deduction of withholding tax.
He praised the FBR for holding numerous meetings with the KCCI and taking into consideration the chamber’s suggestion pertaining to exemption from withholding tax. Makda said traders of yarn would pay a minimum tax of 0.1% on their annual turnover on a monthly basis on the 30th day of each month and monthly withholding tax statement would be e-filed under Section 165 of the Income Tax Ordinance, which was widely demanded by the stakeholders.