ISLAMABAD: The newspaper industry of the country is likely to face a 15 percent Value Added Tax (VAT) on imported and locally supplied newsprint from the upcoming fiscal year 2010-11, official sources said on Wednesday.

According to sources, the Federal Board of Revenue (FBR) authorities had earlier proposed a five percent reduction in the VAT on imported and locally supplied newsprint. However, due to strong opposition from international financial institutions, the FBR had to revise its recommendations, sources added. Consequently, both local and imported newsprint would be subjected to a 15 percent VAT from July 1, 2010, sources said.

At present, the newspaper industry is enjoying a 16 percent General Sales Tax (GST) exemption on both local and imported newsprint, they said. But with the imposition of the 15 percent VAT, the cost of production is likely to increase by more than 15 percent as the newsprint would be taxed at each stage of import, sources added. Similarly, the printing presses and other machinery, being the capital goods and forces of production, would also be subjected to the 15 percent VAT in the fiscal year 2010-11, sources added. sajid chaudhry
Source: Daily Times
Date:4/29/2010