Multan : The Pakistan Cotton Ginners Association (PCGA) has announced that it has suspended the purchase of phutti (raw cotton) from growers in protest against the continuation of a new system of sales tax and the federal cabinet’s refusal to restore the old system.
Farmers sharply reacted to the ginners’ decision, describing it as a “stab in their back” and said it came despite earning profit of millions of rupees in the current season. According to sources, another group of ginners has announced that they will continue to purchase raw cotton from the farmers as usual.
They stated that it was a dispute between the composite units and the Federal Board of Revenue (FBR) because they did not pay taxes over the last four to five years and made excuses to evade the taxes. Now, there are defaulters of more than Rs5 billion, but they are putting pressure on the government to accept merely Rs1.5 billion. About 90% of factories have so far been closed in Sindh after completion of their season and 60% of ginning factories are working in south Punjab.
Oil mill owners have not recognised and approved the association and there are two associations working in the field, but both are reluctant to pay taxes.