MUHAMMAD SHAFA

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry on Wednesday that the global economic downturn is a “primary” factor in Pakistan’s falling exports.

Addressing a press conference at Federation House, FPCCI president Zubair F. Tufail said this was not something confined to Pakistan and that larger economies like India and China have also suffered double-digit declines in exports in recent years.

“Unfortunately, Pakistan’s exports volume is falling over the last three years due to a primary reason of world economic recession and lower international prices of goods,” he said, adding that “besides Pakistan, the global economic recession has also caused a fall to other countries exports”.

The global economic recession has reduced Turkey’s exports by 20 percent, India’s by 18, China’s by 12, and Japan’s, Indonesia’s and Pakistan’s by 14, he said. “Pakistani exporters say that there are other reasons for the fall of exports, including higher cost of business comparing to that of the competitive nations, particularly the high gas and power tariffs”.

He also said the nearly Rs300 billion of various tax refunds, which are stuck with Federal Board of Revenue, as other reason for the exporters’ financial turmoil and Pakistan’s declining exports.

He said an “inordinate” the delays in the release of stuck income tax and, sales tax refund claims, rebate, drawback of local taxes and levies pending with the FBR were causing severe financial problems for exporters. He said the issue was time and again taken up with Finance Minister Ishaq Dar and the chairman of the FBR, to no avail.

“We are facing severe liquidity crunch,” he said. Presently, the exporters are either unable to ensure timely export orders or they have to obtain loans from banks against high markup that resulting an increase in the cost of production besides affecting ‘competitive edge’ in the international market, he said.

After repeated the requests by the FPCCI and the export associations Prime Minister Nawaz Sharif had announced an export package of Rs180 billion to five export industries, following consultations with his advisor on taxation, Haroon Akhtar, and Finance Minister Ishaq Dar. The initiative was highly appreciated by stakeholders including FPCCI, he said, expressing the hope that industrial units which had shut their productions will revive their manufacturing.

But no implementation on that package was made despite a lapse of three months, he said.

He expressed concerns over the FBR’s ‘frequent’ raids on business organizations. “The Chairman FBR Dr. Muhammad Irshad Khan on his visit to Federation House on February 16 last assured the business stakeholders of delaying raids and record seizing of businessmen for a month.”

He said the raids are still being conducted even with more intensity, urging the government to immediately stop raids. If it is necessary for the FBR to conduct a raid somewhere, it should first take associations and chambers on board.