SIALKOT-The abolishment of zero-rated regime will be resulted in 35 percent instant decline in Sialkot exports, as the district’s five zero-rated export sectors including sports goods, value added textile, surgical instruments, leather goods and carpets have rejected the discontinuation of “No Payment No Refund Regime” in this federal budget by the government.

These views were expressed by the representatives of Sialkot district’s all main trade bodies including Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) during a media talk at PRGMEA House Sialkot here on Sunday.

They termed it an ‘IMF Budget’ and a planned conspiracy to destroy entire export industry, spread unemployment, diminish foreign exchange earnings and deteriorate the economy.

Talking to the newsmen, Luqman Amin (Administrator PRGMEA Sialkot) said that imposition of 17 percent sales tax by the government is a bomb which will destroy the entire value added export, industrial chain and allied industries as well.

“Imposition of 17 percent sales tax will compel entire industry to closure. This will compel the foreign buyers to shift to other regional competing countries, which will drastically hurt our economy. If the government does not pay attention to the genuine grievances, the stake holders will observe “No Export Days” as sign of protest”, he added.

The representatives of different trade bodies added that the Federal Board of Revenue (FBR) has put entire burden on the export industry.

Luqam Amin (Administrator PRGMEA Sialkot) stated that the export industry is bleeding in wake of severest ever liquidity crunch in the history of Pakistan as more than 200 billion rupees of exporters in Refunds of Sales Tax, Customs Rebate, Withholding Tax, DLTL and DDT are already held up with government.

Discontinuation of No Payment No Refund Regime will further stuck up 14 percent of exporters liquidity in every four months as one shipment takes four months for completion which means 42 percent exporters liquidity will stuck up in a year, he added.

The government claims that they will Refund of Sales Tax Claims in two months is based on ignorance as it takes minimum four months to manufacture garments from the date of purchase of yarn and hence the government claims to start refund in two months is not possible as the total time will be six months minimum.

The Sialkot exporters expressed grave concern over this critical situation. They added that collecting sales tax and then refunding - is a futile exercise which creates hassles for exporters and also opens flood gates of corruption.

No collection and no refund of sales tax from five zero rated export sectors is a tried and tested formula for increasing revenue and exports.

On this occasion, the representatives of Five Export Sectors including Pakistan Readymade Garments Manufacturers and Exporters Association(PRGMEA), Sialkot Chamber of Commerce and Industry (SCCI), Surgical Instruments Manufacturers Association of Pakistan (SIMAP) , Pakistan Hosiery Manufacturers Association(PHMA) and Pakistan Sports Goods Manufacturers and Exporters Association(PSGMEA) concluded that If No Payment No Refund System is not restored for these sectors , which contribute 70 percent of total national exports and generate 50 percent of total national employment, it will be resulted into a closure of industries, complete chaos, mass unemployment, widespread anarchy and law and order situation.