- Tax liability of large companies will “increase significantly”.
- Press, media bodies say members are under constant pressure.
- Tax will discourage any future FDI in Pakistan, reads the letter.
The All Pakistan Newspapers Society (APNS) and Pakistan Broadcasters Association (PBA) urged Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb on Saturday to withdraw the proposed amendment regarding the disallowance of sales promotion and advertising costs in the Finance Bill 2024-25.
In separate letters sent to the Prime Minister and Finance Minister Aurangzeb, both entities emphasised that members of PBA and APNS are already facing severe hardships due to the contraction of the documented economy, lack of innovation, and overall lacklustre economic growth.
They added that due to an amendment in the recent finance bill, sales promotion and advertising expenses, up to 25% of a company’s total, will not be available for adjustment in the income tax return.
“In other words, the tax liability of the large multinational companies will increase significantly, moreover, the additional tax liability will attract super tax,” read the letters.
Both entities added: “The effective tax they pay is already the highest in the region and this bar on claiming sales and promotion and advertisement will add fuel to the fire and make us further less attractive, from a foreign direct investment perspective.”
They said the APNS and PBA were aware of the challenges being faced by the government and therefore supported it in its efforts to document the economy and highlight the positive steps being taken by all stakeholders.
“We are also cognisant that the economic slowdown is unavoidable and requires patience and resilience from every section of society, which includes our members, their staff and workers and we continue to highlight positivity,” the letters mentioned.
The media and press bodies emphasised that their members were under constant pressure, had reached a threshold, and could not face a further decline in our business.
“The consequence of further decline means unemployment due to closure of small media channels and newspapers and its eventual negative impact on the overall community,” read the letter.
While both APNS and PBA commit to stand on the frontline with the state and government, despite the challenges they are facing, they expect that rationale will prevail.
“The curb on a claim of sales and promotion and advertisement will have a huge impact on our members. Our customers, the multinationals are already walking on thin ice, when compared to the opportunities in other regional countries and keeping them engaged is the responsibility of all of us.
“Those who stayed with us for last many decades should not be punished, for short term gains by increasing their cost of doing business and adopting knee jerk measures to collect revenue, which is not sustainable and in the longer run will impact the documented economy,” they said in the letter.
The press and media bodies insisted that the proposed change is “also very weak, neither the intent of global best practices were considered, nor the local environment has been evaluated”.
“Additionally, it will discourage any future Foreign direct investment (FDI) in Pakistan.”
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