Pakistan Yarn Merchants Association (Sind & Baluchistan Zone) has strongly reacted to 4 per cent withholding tax instead of 1 per cent, as clarified by the Federal Board of Revenue (FBR). Terming the decision ‘not acceptable at any cost’, association Chairman Muhammad Saqib Goodluck said in a letter to the FBR Chairman that it would prove highly disastrous.

Collection of advance income tax on the total amount of every receipt would raise the cost manifold, as local manufacturers, spinning units and commercial importers of yarn worked at low margins due to large volume, he said. Deduction of advance tax on value of receipt would worsen the liquidity crunch for the industry because refunds are issued after long delays, report quoted him as saying.