LAHORE - Pakistan Hosiery Manufacturers and Exporters Association (PHMA), in its budget proposals for 2018-19 submitted to the commerce ministry's textile division, has called for reducing energy cost, abolishing Export Development Fund and lessening Sales Tax and WHT on industrial raw material to make the exporters competitive in global market.

PHMA Central Chairman Dr Khurram Anwar Khawaja stated that the association in its budget proposals has recommended that all pending claims of customs rebate be cleared and the government should allocate funds in the upcoming budget 2018-19 in this regard.

It is proposed that in future, all customs rebate claims to be settled and paid through State Bank of Pakistan at the time of realization and payment of export proceeds. This proposal is not only workable but the most pragmatic because now form is being done electronically, he added.

He proposed the government to reduce sales tax (ST) from 17 percent to 3 percent, withholding tax (WHT) from 5.5 percent to 1 percent in the upcoming budget to cut the cost of production.

He said that tariff also needs to be rationalized and brought at par with regional competing countries to give level-playing field to PHMA exporters.

He said that the PHMA has also requested that permission for import of yarn and other raw materials to the stitching units and any other single unit of value chain (either knitting/ weaving/ dyeing/ printing) for garment manufacturing meant for export under the DTRE Scheme be allowed to Ministry of textile license holders (exporters) whose licence is renewed after every two years.

It is also requested that stitching units or any other single unit also to be allowed under the rules and procedures of DTRE scheme to outsource any certain percentage of work involved in manufacturing of goods meant for export.

Dr Khurram said that the association further proposed whenever the government desires to impose regulatory duty on import of cotton yarn, it should also impose the same on export of cotton yarn and there should be time limit and duration of imposition of duty.

As the government has abolished duty on cotton import, it should also abolish duty on import of cotton waste. This will support enhancing the value added textile exports.

It is proposed that sustainability related equipment including Effluent Treatment Plants (ETP) and Wastewater Treatment Plants (WTP) and their parts including filters and membranes, should be allowed to be imported duty free under SRO 809.

The ETP and WTP should be included in SRO 809 and SRO 809 be extended till Dec 2019. Sales Tax percentage should be revised from 17 percent to 3 percent and withholding income tax to be revised from 5.5 percent to 1 percent.

Although zero rating has been continued under SRO but we strongly believe that this zero rating should be converted into an Act from existing SRO system to boost the confidence of the stakeholders.

It is imperative that government should broaden the tax net by imposing sales tax on retail stage as government can generate revenue of billions of rupees.

It is better that exporters be exempted from payment of WWF and they allowed to use the amount for labour related compliance matters which will directly benefit for the welfare of workers engaged in the manufacturing process.

The PHMA proposed that EDF on exports must be abolished and a trade development surcharge be levied on imported luxury items. The association proposed that at least 80 percent of the cost of all certifications and foreign lab testing should be reimbursed by the government as past practice.