Fruit and vegetable exporters and importers in Pakistan have voiced concerns over the proposed shift to a normal tax regime in the 2024-25 budget. The All Pakistan Fruit and Vegetable Exporters, Importers, and Merchants Association (PFVA) communicated these concerns through letters to the Ministry of Commerce, highlighting the impracticality of complying with the normal tax regime due to the unregulated nature of the trade. The Federal Government's proposal includes a 29% tax on export earnings, a significant increase from the current 1% under the fixed tax regime. This change, the PFVA argues, could detrimentally affect Pakistan's economy.
Pakistan aims to meet a $47 billion tax revenue target for the next fiscal year, marking a 40% increase from this year. This ambitious target includes a 48% increase in direct taxes and a 35% increase in indirect taxes, with non-tax revenue expected to rise by 64%. Amidst these financial adjustments, the fruit and vegetable sector, which has achieved $700 million in exports, faces challenges such as climate change and rising costs, impacting its competitiveness on a global scale. The PFVA's goal to elevate exports to $1 billion and eventually to $3 billion over five years could be hindered by the new tax proposal.
In response to the budget announcement, various export sector representatives have criticized the budget as regressive. A coordinated effort led to the declaration of a "Black Day", next week, where all exports from Pakistan will be halted to protest the new tax measures. Jawed Bilwani, chief coordinator of the All Exports Association of Pakistan, emphasized the collective disappointment among exporters and warned of further actions if their demands are not met.
Source: arabnews.com