Pakistan: cotton ginning factories closed down
A number of cotton ginning factories are shut in Pakistan, as government and ginners remain disagree over the issue of sales tax on the purchase of cotton.
“We have shut 200 factories,” said Nawab Shahzad Ali, vice chairman of the Pakistan Cotton Ginners Association (PCGA). “Production will start only after the dreaded decision is reversed or amended.”
The government has imposed a 3.5% sales tax on the purchase of cottonseed. But ginners have been asked to collect the tax only from brokers and the middlemen, leaving out the farmers who directly sell the crop.
“This is absurd. We have been turned into tax agents. That is not our job,” said Mr Ali. “It is impossible to distinguish between a broker and a farmer. Then if we don’t collect the sales tax then authorities will hold us accountable.”
While the PCGA has been on a strike since the first week of August, it has not stopped new cotton bales from reaching the market and trading at the cotton exchange has been running smoothly, traders said.
