8pc minimum tax on service sector opposed

September 7, 2015 Off By Web Desk

KARACHI: All Pakistan Manpower Outsourcing Association (APMOA) on Tuesday opposed 8% minimum tax on service sector and called it a discriminatory tax imposed by the Federal government which will adversely affect the sector.

Addressing a press conference at Karachi Press Club, APMOA Chairman Abu Bakar Vice Chairman Murad and Media Coordinator Sadaf told that imposing minimum 8% tax on services sector is unjust, counter-intuitive, against the principals of free market and contrary to practices of the better marketplaces in the world.

They said that it would have disastrous effects on the development of outsourcing sectors in the country.

Sadaf said that outsourcing business model depends on high-volume of man-hours of services providing but at a much lower gross margin. In Pakistan, service providers are operating at a gross 3% to 6% but with large volumes of business are able to sustain operation.

She said imposition of 8% minimum tax will render the local outsourcing business model unviable and this will likely result in a catastrophic collapse of the industry leading to the loss of livelihood for many individuals working in outsourcing companies.

They urged the Prime Minister of Pakistan and Finance Minister to withdraw the tax and restore related clause in its original condition.