FBR Chairman stands firm on withholding tax for flour

LAHORE: Negotiations between the Flour Mills Association and the Federal Board of Revenue (FBR) ended in a stalemate as the Chairman of FBR Malik Amjad Zubair refused to rescind the withholding tax imposed on flour.

Read more: Flour Mills Association goes on strike against withholding tax

The meeting was conducted via videoconferencing software Zoom at the office of Punjab Food Department’s Secretary. The meeting was attended by Punjab Food Minister Bilal Yasin.

The meeting saw the Flour Mills Association advocating for the abolition of withholding tax and annual turnover tax on flour mills throughout Punjab. They argued that eliminating these taxes could potentially lower the price of flour for consumers.

The association further contended that complying with the documentation requirements for withholding tax posed significant challenges for flour dealers and shopkeepers.

In response, the FBR chairman pointed out that strict conditions imposed by the International Monetary Fund (IMF) on tax collection from retailers constrained their ability to remove the withholding tax on flour dealers and retailers.

The meeting concluded without a resolution.

Read more: Punjab govt to fix flour prices throughout the province

Previously, the Flour Mills Association launched a protest against the imposition of withholding tax on wheat. The association indefinitely closed of flour mills all over the country. A spokesperson for the association stated that collecting taxes through flour dealers and retailers was impractical.

He noted that many dealers refuse purchases when asked about their tax status, complicating tax collection efforts. The spokesperson stated that milling activities would remain suspended until their demands regarding the withholding tax were met.

The spokesperson also voiced concerns that enforcing this tax could potentially foster corruption within the FBR.