In the budget for the fiscal year 2019-20, the Pakistan Terheek-e-Insaf (PTI) government has increased withholding tax on secondhand clothes by 5 per cent.
Reports quoted the Pakistan Second Hand Clothing Merchants Association (PSHCMA) as saying that the tax on used clothes has been increased from 1 per cent to 6 per cent, effective July 1 – start of the new fiscal year.
The development is expected to pave way for an increase in the costs of secondhand clothes by at least five per cent — something that could’ve been bought for Rs200 earlier, can now cost you Rs210; Rs500, Rs525.
Urging the government to bring down the withholding tax amid rupee depreciation against the dollar, members of the association have also demanded that 10 per cent regulatory duty (RD) on used clothes import be removed.
Pakistan imports used ladies garments, gents’ trousers and shirts, blankets, warm clothing, winter garments, shoes etc mainly from the United States (US) and Europe. Landa Bazar is a marketplace where all these secondhand goods are sold at cheaper rates.
According to the figures of Pakistan Bureau of Statistics (PBS), import of worn clothing has risen to 426,797 tonnes valuing $165 million against 404,737 tonnes worth $148m in the last fiscal year.
However, the development suggests that the trend might not live long with even used clothes and other items being out of reach for low-income groups.
