FAISALABAD – The Pakistan Textile Exporters Association demanded refund of deemed duty on imported industrial inputs, allocation of 30 billion rupees for local taxes drawback regime and relief of 0.5% on withholding tax regarding exports.
Rana Arif Tauseef, the chairman of the PTEA, said that exporters’ demands do not involve any burden on the exchequer but is only reallocation of priorities to facilitate the export sector and to strengthen the national economy.
Drawing attention towards the importance and role of textile industry and exports in national economy, he said that textile industry was in grip of severe gas and electricity loadshedding and is confronted with liquidity crunch and tough international competition. Textile exports have dipped by 1.33 billion dollars over the last seven months and are estimated to further go down by 2.5 billion dollars by end of current fiscal, he said and added that thousands of mills have been closed rendering millions of workers jobless.
“Resultantly, industries are being shifted to other countries and we are losing our traditional export markets. This negative trend could be stopped with only some readjustments and reallocation of funds in current budget,” he said. Arif added that emergency measures on solid and practical basis are required to resolve the energy (gas and electricity) crisis in order to keep the wheel of industry running and to strengthen the economy of the country.
He said that gas crisis would turn severe within next three months and will further deepen the crisis. He said that as internationally exports are “Zero Rated” and to compete at international level we have to be provided level playing field to this most important segment of the national economy.
In this connection, deemed duty drawback to exporters should be allowed on imported industrial inputs like dyes and chemicals etc. he said that Ministry of Textile Industry had agreed allocation of Rs30 billion for payment to exporters under local taxes drawback. “This fund should be released without any further delay,” he demanded.
Touching upon another important issue, the Chairman PTEA said that Instead of spending Rs10 billion to mitigate the sufferings of textile sector, this amount is being doled out to TDAP to conduct foreign tours and hold exhibitions etc (non productive activities). He demanded that this fund of Rs. 10 billion allocated to TDAP should be allowed to textile exporters as the exporters are already paying 0.25% to TDAP under export development fund.
He said that relief of 0.5% in turnover tax should also be allowed to exporters on withholding tax to further facilitate the exporters so that they can concentrate on export promotion and earn more forex for the country. Arif said that billions of rupees of exporters have been stuck up in Sales Tax, Research and Development (R&D), Custom Rebate and local taxes drawback refund regimes for many years.
He requested for immediate release of these funds to help out the exporters to cope with liquidity crunch crisis.
He claimed that Pakistan has infrastructure and ability not only to overcome the current export deficit of 2.5 billion USD but also to achieve 28 billion USD instead of 25 billion USD export target. Supporting his demands, he said that these measures would have no financial impact on the Government but the textile crisis could be controlled only through reallocation of funds and duties paid by the exporters.