LAHORE - Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has demanded that export sector should not be included in the normal tax regime, as it would hit the businesses hard.
PCMEA delegation stated this in a meeting with Lahore Chamber of Commerce and Industry (LCCI) President Kashif Anwar here at LCCI on Tuesday. The delegation was led by former LCCI president Shahid Hassan Sheikh. The Association’s Executive Committee members Mian Atique Rehman, Raja Hassan Akhtar, Abdul Latif Malik, Former chairman PCMEA, Usman Ashraf, Senior vice Chairman, Ijazur Rehman, Major Akhtar Nazir, Tahir Aslam, Iftikhar Tahir, and Faisal Saeed were part of the delegation.
The delegation added that government should provide facilities to the export sector. Bringing the export sector into the normal tax regime will reduce revenues and decrease dollar inflow into the country, which will further increase inflation, they argued. They said that exporters might relocate to countries like the UAE in special economic zones. They demanded the formation of export-friendly policies and the announcement of at least a five-year policy for exports, which should not be affected by future budgets.
The government facilities for exporters, such as financing, moved from three to 19 percent, which is not viable. Additionally, all the facilities like DLTL and incremental DLTL were withdrawn, and the previous four years’ amount was still unpaid. Now, the facility of fixed tax will be withdrawn, which is unjustified. They also called for a review of agreements with IPPs to reduce electricity costs in the country; a reduction in gas prices; and the restoration of other subsidies for exports.
LCCI President Kashif Anwar noted that in the past three years, the country has witnessed devaluation, and with the rise in energy costs, input costs have also gone up. Despite these challenges, due to governmental policies and the hard work of exporters, Pakistan’s exports have reached 30 billion dollars. He remarked that removing the facilities provided to exports now will lead to a decrease in export volume. The LCCI President hoped that this issue would be resolved soon. He clarified that they are not against taxing exporters, but the longstanding tax regime on exports should not be changed.
He pointed out that exporters were previously subject to a one percent final tax on turnover, which has now been included in the normal tax regime, affecting exports. He emphasized the need for a complete consultation process before implementing such laws.