Latest news with #SalimValimuhammad
Business Recorder
4 days ago
- Business
- Business Recorder
PCDMA chief exposes rampant EFS exploitation
KARACHI: Salim Valimuhammad, Chairman of the Pakistan Chemicals & Dyes Merchants Association (PCDMA), has exposed rampant exploitation of the Export Facilitation Scheme (EFS), with fraudulent practices reportedly costing the national treasury a staggering Rs 25 billion. The veteran trade representative warned that the scheme, designed to boost exports, has instead become a pipeline for duty evasion and revenue leakage. Presenting import-export data analysis, Valimuhammad revealed that under Chapters 27 to 32 of chemicals & dyes - particularly 3204 - imports surged by 80% between 2023-2024 while corresponding exports showed no growth. 'This glaring discrepancy proves large-scale duty-free imports are being diverted to local markets instead of being used for export production,' he stated in a press release. The PCDMA chief provided a detailed breakdown showing that just for Chapter 3204 imports, the government should have collected approximately Rs 6 billion in Customs duty and Rs 18 billion in sales tax, totalling Rs 24-25 billion in potential revenue. However, actual collections remained alarmingly low, indicating massive leakage in the system. Valimuhammad proposed urgent reforms to curb EFS misuse, including immediate processing of 18% sales tax rebates and Customs duty refunds upon receipt of export remittances to improve cash flow for genuine exporters. His key recommendation was imposing a complete ban on duty-free imports under EFS without valid export Letters of Credit (LCs). Highlighting the scheme's distortive impact on trade, the PCDMA chairman noted a 25% decline in association membership over two years as regular importers couldn't compete with industries availing duty-free raw materials. 'While importers pay customs duty, income tax and additional sales tax, some industries get completely tax-free imports under EFS - this discriminatory treatment is destroying level playing field,' he argued. 'Dozens of legitimate importers of chamicals & dyes have been forced to shutter their businesses completely as a direct result of these scheme violations.' Expressing frustration over official inaction, Salim Valimuhammad revealed that despite submitting detailed budget proposals to FBR highlighting EFS anomalies and suggesting corrective measures, the association has received no response. He made a direct appeal to Prime Minister Shehbaz Sharif, Finance Minister Muhammad Aurangzeb and FBR Chairman Rashid Mahmood Langrial to immediately restrict EFS benefits only to actual export production and completely disallow duty-free imports without verified export LCs. Copyright Business Recorder, 2025
Business Recorder
06-06-2025
- Business
- Business Recorder
ST returns filing: PCDMA concerned at FBR's new requirement
KARACHI: The Pakistan Chemical & Dyes Merchants Association (PCDMA) has raised serious concerns about difficulties faced by traders in filing their sales tax returns, following a new requirement introduced by the Federal Board of Revenue (FBR). Through SRO 55(I)/2025, the FBR has made it mandatory for all registered commercial importers, distributors, and wholesalers to declare their stock position in Annexure H1 with every monthly sales tax return. However, PCDMA Chairman Salim Valimuhammad said the lack of clear instructions from the FBR has created unnecessary confusion and hardship. He explained that many traders submitted their March 2025 returns without Annex H1 simply because they didn't understand the process. As a result, they're now unable to declare their opening stock for April, and the delay continues even in June. 'PCDMA has received many complaints from members who are still unable to file their April 2025 returns due to this confusion,' Valimuhammad stated. He added that many traders were forced to go back and forth with the FBR for clarification. Eventually, the FBR allowed revised returns without needing to change Annex A or C or seek commissioner approval—but by then, it was too late for many. To address the issue, PCDMA is urging the FBR to grant traders a 60- to 90-day grace period to submit Annexure H1 after filing their returns. This would be similar to the 120-day window already available to manufacturer-exporters. 'PCDMA believes that such decisions should be made after proper consultation with trade bodies,' Valimuhammad said. He emphasized that timely and clear communication is crucial to ensure compliance and avoid similar problems in the future. PCDMA continues to push for reforms that protect traders' interests and promote smoother tax procedures. The association urges urgent action before more disruptions affect business operations, confidence, and overall revenue collection in the coming months. Copyright Business Recorder, 2025
Business Recorder
25-04-2025
- Business
- Business Recorder
Complexities: PCDMA concerned over issues faced by taxpayers
KARACHI: The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has expressed serious concern over the increasing challenges faced by taxpayers in filing their returns due to the complex structure of the newly introduced Annex H1 and Annex J, as well as, the technical difficulties related to Unit of Measure (UoM) requirements. In a letter to the Chairman of the Federal Board of Revenue, Rashid Mehmood Langrial, PCDMA Chairman Salim Valimuhammad and Danish Saleem, Advisor to the Subcommittee for Sales and Income Tax, pointed out that the newly uploaded Annex H1 by the FBR was causing confusion and compliance issues due to unclear guidelines, frequent regulatory changes, and persistent portal glitches. 'Taxpayers are finding it increasingly difficult to reconcile withholding statements and comply with filing requirements due to the overly complex design of Annex H1,' said Salim Valimuhammad. 'The situation is further aggravated by the form's calculation mechanism, which mistakenly subtracts Sales Value instead of Cost Value.' PCDMA Chairman emphasised to the FBR the need to allow taxpayers to voluntarily enter the Cost Value before submission of returns, to ensure accurate reporting and avoid erroneous assessments, delayed refunds, or penalties. 'Taxpayers continue to face identical challenges with Annex J, especially when reconciling transactions under constantly fluctuating tax rates. Unclear guidelines combined with recurring portal malfunctions are imposing excessive compliance burdens - particularly on small businesses and individuals lacking professional tax assistance. Most critically, Annex J replicates Annex H1's fundamental error by deducting Sales Value rather than Cost Value, a systemic flaw that PCDMA confirms is causing rampant inaccuracies in tax filings across the board.' Another major challenge reported by members is the technical complexity of the Unit of Measure (UoM) codes. The lack of clarity in categorizing goods and services, coupled with system glitches, is causing filing errors and unnecessary delays, especially for businesses involved in diverse inventories and import/ export operations. PCDMA urged that such major changes should not be implemented without consulting key industry stakeholders. The association is urging the FBR to involve trade bodies and professionals in the decision-making process to ensure smoother implementation. Salim Valimuhammad said 'A collaborative approach will help reduce errors and build trust among the taxpayer community.' Copyright Business Recorder, 2025
Business Recorder
23-04-2025
- Business
- Business Recorder
PCDMA submits budget proposals to FBR
KARACHI: Pakistan Chemicals & Dyes Merchants Association (PCDMA) has submitted budget proposals to the Federal Board of Revenue (FBR), aimed at providing relief to taxpayers and building trust between the business community and the tax authorities. In budget proposals, PCDMA Chairman Salim Valimuhammad highlighted the increasing burden of compliance faced by taxpayers, stating that excessive documentation and frequent audits are discouraging participation in the formal economy. Budget proposal committee headed by Umair Tariq. The PCDMA chief emphasized that many taxpayers are willing to comply but struggle due to limited technical knowledge and the harsh behavior of tax officials. The association called for a more supportive and educational approach from FBR to encourage voluntary compliance. He also raised concerns over the audits conducted under Section 165 related to withholding tax returns. As withholding agents already handle tax collection responsibilities, the additional pressure of audits creates unnecessary stress. The association proposed discontinuing these audits to ease the burden on businesses. A significant issue outlined in the proposals was the difficulty families face in continuing businesses after the death of a sole proprietor. Under current laws, they are required to start the registration process from scratch. The PCDMA recommended allowing a family member to be added as a representative in the deceased's IRIS profile to ensure continuity of business operations. Salim Vali Muhammad called for the revival of the Final Tax Regime (FTR) for commercial importers. The PCDMA pointed out that although commercial importers are still paying the Additional Sales Tax (Value Addition Tax), the audit exemption that was previously granted in return has been withdrawn without explanation. The association demanded either the reinstatement of audit immunity or the withdrawal of the additional tax. He further urged the government to provide relief under Section 8B by restoring the previous facility for commercial importers. If immediate restoration is not possible, it suggested that at least 95% of output tax should be adjustable, with only 5% payable to address liquidity issues. 'To combat the issue of fake invoices, the association proposed reducing the rate of Further Tax from 4% to 1%, making it easier for genuine businesses to comply. It also recommended a phased reduction in the general sales tax (GST) rate, starting with a cut to 16%, with the aim of reaching single-digit rates in the long run.' Regarding local supplies, the association suggested lowering the withholding tax rate on raw materials to 2% for companies and 2.5% for individuals. This, they believe, would encourage more businesses to join the formal economy and improve documentation. The PCDMA strongly recommended the discontinuation of the Export Facilitation Scheme (EFS), arguing that it has primarily benefited unscrupulous actors who exploit the system to evade taxes under the guise of exporting goods. The association emphasized that such schemes are incompatible with Pakistan's current economic environment, where weak enforcement mechanisms and widespread pilferage remain major concerns. 'EFS has not only failed to achieve its intended purpose but has also created difficulties for genuine importers while encouraging non-taxpayer actors to thrive. The association urged the government to instead focus on improving and expediting the standard refund system to support legitimate exporters without facilitating tax evasion.' The PCDMA also raised concerns about unequal treatment between commercial and industrial importers under Section 148 of the Income Tax Ordinance. The current higher tax rates for commercial importers were described as unjustified, particularly since many manufacturers misuse their status to import goods for local sale. The association called for an end to this disparity or the reinstatement of the FTR if the higher rates are to continue. Salim proposed streamlining customs duties under PCT 32.04, suggesting a flat rate of 5% to eliminate under-invoicing and plug revenue leakages. It also demanded the abolishment of the Rs 500 WeBOC token fee, pointing out that importers are now paying an equivalent PSW fee and should not be charged twice. The PCDMA recommended capping customs duties on raw materials such as chemicals and dyes at 5%, arguing that the current higher rates—up to 20%—along with additional customs duties, are detrimental to business and must be eliminated. The proposals reflect the business community's desire for a fairer and more efficient tax system and underscore the need for reform to restore confidence and support economic growth. Copyright Business Recorder, 2025
Express Tribune
18-04-2025
- Business
- Express Tribune
Pakistan, China eye closer trade ties at InterDye 2025
Listen to article A high-profile delegation from Pakistan's chemicals and dyes sector held key discussions with Chinese industry leaders during InterDye 2025 in Shanghai, aiming to boost bilateral trade and cooperation. According to a press statement issued on Friday, the delegation was led by Salim Valimuhammad, Chairman of the Pakistan Chemicals & Dyes Merchants Association (PCDMA). They met with Shi Xianping, Chairman of the China Dyestuff Industry Association (CDIA), and Weina Wang of the China Council for the Promotion of International Trade (CCPIT) to explore greater collaboration. The two sides discussed expanding trade under the Pakistan-China Free Trade Agreement (FTA), especially by including more dye-related products under HS Code 3204.1600, which are in high demand in Pakistan's export sectors.
