RECORDER REPORT

KARACHI: All Pakistan Textile Mills Association (APTMA) on Saturday demanded fully implementation of the export-led growth package worth Rs 180 billion to bailout the domestic textile industry and to enhance the country’s declining exports.

“The Prime Minister Nawaz Sharif announced textile package in January this year for textile industry was just an announcement, as only an amount of Rs 400 million has been released under the package yet”, said Yasin Siddik, former chairman APTMA while addressing a press conference at APTMA House.

Asif Inam, Chairman Sindh Balochistan Zone and Fawad Anwar, former Member Executive Committee APTMA were also present on the occasion.

Siddik said that government has allocated an amount of Rs 4 billion only for the next financial year against the total textile package of Rs 180 billion for a period of 18 months based on the requirement of Rs 10 billion per month.

“The allocation in budget clearly showing the government’s attention that how much it is serious to support the exports and domestic industry”, he added.

He said despite government’s commitment, some Rs 200 billions of rupees sales tax refunds are still pending, which is creating the liquidity problem and industries are compel to borrow from the banks to meet their operational expenses.

“We believed that delay in refund payments will further lead to disastrous consequences”, he added.

He demanded immediate payment of all pending refunds to provide some relief to the textile sector. He also urged the government that all unprocessed refund claims should also be processed and paid as per commitment of August 14, 2017 to improve liquidity of the textile industry.

Siddik demanded that tax imposed by the government in the federal budget 2017-18 on the five export oriented sectors be withdrawn on immediate basis. He said that presently the system of Zero Rating is distorted and is actually not zero rating in true spirit.

“There is needed to make some changes sales tax on all inputs including packaging materials, spare parts and fuel and energy be made and refund on priority basis”, he added.

He said that on the contrary to industry demand, the government has also increased turn over tax from 1 percent to 1.25 percent in the budget 2017-18. He demanded for reduction in turnover tax upto 0.25 percent.

Siddik said that rising import of textile products is also directly hurting the domestic industry, therefore domestic industry of Pakistan be secured from large scale import of textile products from India and China. For reduce imports from neighboring countries, government should impose a regulatory duty at 15 percent on import of man-made fiber yarn and fabrics under chapter 55, he suggested.

He also urged government for reduction of utility tariff for textile industry and proposed Rs 7 per unit (khw) inclusive of all taxes and surcharges.

Fawad Anwar said that unfortunately the government’s priorities do not include the textile industry which is earning about 60 percent of the foreign exchange through exports for the country and providing more than 38 percent employment.

He informed that due to high tariff of gas and electricity, cost of doing business in Pakistan is some 10 percent higher than regional textile competitors including India and Bangladesh, of which Pakistani exporters are unable to compete in the world market.

The situation is further aggravated due to delay in payment of sales tax refunds and no implementation on textile package and now the industries are force to shutdown their operations.

Fawad requested the government that all incentives announced in the Prime Minister scheme should be implemented without any delay to support the textile industry. In addition, the government should remove the levy of Gas Infrastructure Development Cess (GIDC) on the system gas and gas provided to the textile industry should be supply at the rate of Rs 400 per MMBTU inclusive of all taxes and levies, he added.