ISLAMABAD - Textile sector representatives has urged the government to reduce high cost of doing business, clearance of refunds, extension of long term finance facility for garment plants, reduction in minimum turnover tax and exemption of five exporting sectors from further tax.

In a Joint press conference, the chairmen and office bearers of all textile industry associations pointed out that an immediate reduction in electricity tariff to Rs7/kWh without levy of surcharges and across the board supply of RLNG and system natural gas to industrial consumers both for captive and processing use at Rs400/MMBTU without levy of GIDC is an urgent need of hour for revival of textile industry. APTMA Chairman Aamir Fayyaz said the government should also ensure an immediate payment of all refunds for which RPOs has been issued. All unprocessed refund claims should be processed and paid by August 14, 2017 to improve liquidity of the textile industry, he added.

The association pleaded for reduction in the Minimum Turnover Tax to 0.25 percent in order to improve liquidity of the textile industry. Besides, they have also demanded exemption from the levy of further tax to the five exporting zero-rated sectors. The textile industry has witnessed unprecedented export decline in last two years due to high cost of manufacturing, liquidity constraints, and lack of technology upgradation. In order to arrest the continuous decline in exports of textiles and clothing the prime minister announced Rs180 billion export-led growth package on January 10, 2017, the officials said.

They said the packages envisaged payment of Rs7.29 billion per month deductible of tax of export proceeds but the government has released only Rs2 billion till May 2017. They pointed out that the manufacturers/exporters are confronted with cancellation of exports, delayed investment initiatives due to non-payment of drawbacks and reversal of initiatives announced in the package.

In April 2013, they said, the oil Brent rate was $103 per barrel, which has been dropped to $52 per barrel in March 2017. The industry leadership said the electricity tariff including all surcharges and fuel price adjustment was Rs6.67 per kWh in April 2013, which has gone up to Rs11.31 per kWh in March 2017. In US dollar term, electricity tariff was $6.86 per kWh in April 2013, while in March 2017 it was $10.8 per kWh. At current oil prices, they said, the electricity tariff should have been below 4 cents per kWh but the export oriented textile industry is burdened with multiple surcharges, cross subsidies and system inefficiencies of theft and lesser billing collections.

On the stuck up refund claims, they said, the FBR has rolled back all claims of Refund Payment Orders (RPOs) for the tax period of July 2016 onward on the plea that the claimed amount exceeds certain bench marks. “We request payment of all pending sales tax refunds and duty drawbacks and incentive schemes,” they added.

Despite the fact that furnace oil, diesel and coal were zero rated on August 20, 2016 but zero rating has not been implemented as the Board has prescribed cumbersome procedure. Zero rating of all inputs (in true spirit) including packing materials, spares, coal and HFO etc should be announced, they demanded.

They said the indirect exports should be made eligible under the LTFF scheme. This will help increase in supply of basic textiles to the value added sector. This facility was earlier available in the LTF-EOP scheme. The State Bank of Pakistan should issue circular enabling new investment initiatives. Furthermore, the LTFF facility should also be allowed for building of infrastructure for garment plants. This will encourage investment for garmenting projects. The association is planning to shift its head office to capital in coming days, The Nation learnt reliably.