KARACHI, Jan 7: Flour mills have demanded exemption from income tax and sales tax collected on electricity bills, which they believe would provide direct relief to the flour consumers. Presently, mills are paying 16 per cent sales tax and 10 per cent income tax on their electricity bills, which increases the end-cost of the wheat flour.

In a letter to the chairman Federal Board of Revenue (FBR) Pakistan Flour Mills Association chairman Syed Johar Ali Qandhari pointed out that if industries like leather, garments, sports and surgical goods can be exempted from ST and income tax, why essential and basic food industry could not get the same benefit.

He assured that if this exemption was allowed to the flour millers it will serve the objective of the government to give relief to poor masses at a time when food prices are very high.

He said the world over basic food items were exempted from such levies and taxes to keep prices down. For any government the biggest challenge, he said, is the food security for its masses at an affordable price, he added.

Meanwhile, a delegation of businessmen headed by S M Muneer recently held a meeting with the governor State Bank and apprised her of the expected problems to be emerging from the bumper wheat crop.

The chairman PFMA Mr Qandhari suggested to the SBP to increase the share of bank finance for the procurement of wheat.

He said presently, the private sector has to give 25 per cent cash margin against 75 per cent bank finance for wheat procurement. It would be in the interest of the growers if the cash margin is reduced to ten per cent.

This way private sector would actively procure wheat from the growers, who in return, will go for higher production for next cash crops such as cotton, sugarcane etc.

The delegation members also demanded that the banks should be asked not to adjust working capital of the industry at the close of the year on Dec 31, rather it should be allowed to continue.

The governor SBP had assured to look into the suggestion and hoped that before Feb 15, a decision about the cash margin.