FAISALABAD-The Pakistan Textile Exporters Association has stressed the need for immediate release of funds for payment of outstanding Duty Drawback of Taxes (DDT) claims to achieve desired results of sustainable growth through enhanced exports.
Textile industry has the capacity to add further exports of 5 billion dollars and generate 500,000 new jobs in two years.
In a statement here on Monday, PTEA Chairman Khurram Mukhtar has said that cash flow crunch has squeezed the financial streams and textile exporters are facing hardships to fulfil their export commitments.
An amount of Rs16 billion was approved by the previous Government for payment of DDT claims but this could not be released and the outstanding amount in this regard has accumulated to Rs35 billion, he said.
Moreover, huge amount of Custom rebate claims amounting to Rs10 billion has also been stuck.
Textile industry contributes 8 percent to national GDP remained a low priority area for the policy-makers and the sector has not been given due importance.
Resultantly, a meagre growth of 0.41 percent has been witnessed in textile exports in July to October 2018-19 as compared to previous year which reflects non-seriousness of the government towards the largest manufacturing industry.
Terming value-added textile sector as the main engine of growth, he underlined the need of production of exportable surplus.
He urged for immediate payment of stuck up liquidity in refund regime to get maximum industrial growth and significant increase in exports as cash flow crunch is negatively impacting the export oriented textile industry.
Enlightening system irritants in tax regime, Chairman PTEA stressed for structural reforms in refund system to save the exporters from cash flow crunch.
Pointing out the major tax irritants, he said that textile exporters are facing a serious issue of non-processing of refund claims pertaining to lubricants / oils.
Furthermore effect of income tax credit u/s 65B is not being properly passed to the exporters as huge amount of tax credit claims is lying unprocessed.
Tax authorities at several times made affirm commitments for solution of these issues but the same are still unresolved, he said.
Vice Chairman Muhammad Idrees terming value added textile sector as the backbone of the economy with great potential for earning foreign exchange, urged the Government for immediate release of blocked refunds to enable the textile exporters to retain their hard earned export markets at this time of tough competition.
Government, at several times, set deadlines of liquidating the long outstanding refunds of the textile industry but still huge amounts are outstanding and delay in release of funds had triggered serious liquidity crunch for cash starved textile exporters.
This is having adverse impact on the employment and the economy of the country as textile industry is unable to tap its potential in accordance with capacity, he said. Regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business.
Pragmatic policies in consultation with stakeholders need to be formulated to reduce the cost of business by fixing rates of inputs in line with competing countries in the global market to create a level playing field, he suggested.
Finance is imperative to run the wheels of industry and without it, no one could even think to run industry. Government should set its priorities right and accord preferential treatment to boost the exports and generate industrial activities, he demanded.