LAHORE-The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) on Saturday expressed its disappointment over the performance of the Federal Board of Revenue’s refunds system, voicing the fear that it has not been able to release the sales tax refund claims timely because amount of exporters’ liquidity has started to stuck up due to irresponsible and uncaring approach of the authorities concerned.
PRGMEA Central Chairman Mubashar Naseer Butt, while addressing a hurriedly called meeting of the association held here in view of inordinate delays in exporters’ sales tax refunds, urged the government to immediately release refunds claims of the textile industry, as the government had committed that the exporters’ refunds payment orders (RPOs) would be issued in 24 hours while refunds would be cleared within 72 hours of the issuance of the RPOs, but practically this commitment is not being fulfilled, as the 72 hours are being extended to several weeks.
Mubashar Butt said the government needs to take immediate measures to arrest the slowdown in textile exports, as these policies would bring Pakistan’s most valuable sector on the verge of collapse. He recalled that the government had created a culture of trust among the business community by paying refunds timely, which was appreciable, but the situation has now changed. “We are presently facing gaps and the authorities are not ready to give us reason of delay; even they don’t attend our phone calls, creating a trust deficit and sending a wrong message to the exporters of the value-added textile industry, which is the backbone of the economy.” PRGMEA vice chairman Wasim Akhtar, on this occasion, said that the value-added industry is suffering with low productivity due to shortage of cotton. He said that regional comparison of cost of doing business shows that Pakistan’s wages, interest rates are much higher.
     Wasim Akhtar asked the government to work on a fast track plan to address refunds issue along with other problems of the industry. Priority should be given to the export-oriented garments sector, which was the highest value-added link in the entire textile value chain. He said that exporters are unable to procure and purchase raw materials and other accessories to fulfill their future export orders and this will ultimately collapse the entire export trade, he added. 
     The PRGMEA chief urged Prime Minister Shehbaz Sharif, Finance minister Ishaq Dar and FBR Chairman Asim Ahmed to direct the tax agency to remove bottlenecks in the sluggish refund payment system of the FBR, as exporters are facing a severe liquidity crunch due to delay in payment of sales tax refunds. He also demanded a mechanism to find out the reasons for long delays of refunds under the new system.