Bonafide SME Exporters Suffer Due To Wrongdoings Of A Handful

The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the prime minister (PM) Shehbaz Sharif to the injustice done to bonafide SME exporters because of malpractices of a handful of big exporters who have unlawfully benefited by the fixed tax regime (FTR) by indulging in malpractices.
President UNISAME Zulfikar Thaver said the government has done away with the FTR and indicated that exporters by paying 1 percent fixed tax were indulging in money laundering and making their undisclosed money legal by calling for payments from abroad as advance payment against superficial export orders and later shipping goods after several months and re- transferring value in kind by using other tactics as well just to complete formalities.
The international and national anti money laundering agencies informed the government about such activities by the big exporters of textiles and some commodities.
UNISAME Council members have clarified that the SMEs are not involved in such malpractices and the government must look into the matter and study the different segments and the under developed buying countries and buyers who encouraged and indulged in such malpractices.
It is pertinent to note that some buyers in some African countries do not have official foreign exchange and they insist on transferring exchange through hawala and desire lower rate invoices to save duties and our exporters are compelled to accommodate them inorder not to lose business but it has been observed that our exporters nevertheless pay the FTR on the full value because the withholding tax is deducted on the full remittance. There is no loss to the exchequer in any case.
They emphasized that it is unfair to deny and disallow the FTR facility to all exporters for the sake of a handful of wrong doers.
Thaver said if the question is of increasing revenue than the government may negotiate with the exporters segment wise and increase the FTR rate accordingly.
He added that In such a case the government needs to consider that food and medicine must not be subjected to increased rates as globally food and medicines are given concessionary treatment worldwide.

Posted in: Press Releases