ISLAMABAD: Commerce Minister Engineer Khurram Dastgir Khan stated on Monday that all export-oriented sectors would benefit from the trade package including non-traditional exports to be announced on Tuesday (today).

Talking to Business Recorder, he said that the package has been finalised by the Prime Minister in consultation with the stakeholders.

He maintained that Pakistani exporters’ competitiveness has been affected due to different factors, including cost of doing business, that have been negatively impacted by relatively higher price of gas and electricity vis-a-vis their competitors in the global market as well as regional currency devaluation relative to the Pak rupee.

He further stated that Pakistan has also not invested in new technology in machinery. On the other hand India is now Pakistan’s major competitor in textile sector.

An official on condition of anonymity told Business Recorder that Commerce Ministry had recommended a 8 per cent rebate for all sectors but Finance Ministry was not ready to agree to more than 5 per cent.

The government has agreed to remove customs duty and sales tax on raw cotton and man-made fibres not available in Pakistan as well as removal of import duty and sales tax on industrial machinery is also on the cards.

The Prime Minister has agreed to a 3 percent compensatory rebate for yarn/grey fabric, 4 percent for processed fabrics, 6 percent for home textile/knitwear and 8 percent for garments sector. The proposed rebate for raw and semi-raw exports would be around 4 per cent and value-added sectors (garment) 8 percent, respectively.

Textile sector had sought the following incentives: (i) removal of incidence of customs duty and other add-ons on the import of cotton from January 1, 2017 to enable the textile industry to cover the shortage of cotton. Domestic cotton crop has already been lifted from the farmers’ fields; (ii) duty-free import of all man-made fibres not being manufactured locally to enable the textile & clothing industry to encourage diversification of products and markets; (iii) for reducing cost of doing business textile sector proposed the provision of graduating drawbacks of local taxes and levies at 4% on yarn and grey fabric, 5% on processed fabric and 6% for home textiles, made-ups & garments on export against realization of export proceeds by commercial banks through the State Bank of Pakistan (SBP); (iv) scope of long-term finance facility (LIFF) be enlarged to make indirect exports eligible to avail the incentive terms of the LTFF by all sub-sectors. This will encourage supply of domestically produced goods to the value-added textile industry;(iv) allow input tax adjustment / refund on account of packing materials under the zero rating regime announced by the government which will reduce the cost of production; (v) lifting the moratorium imposed on new gas / RLNG connections to the industry both for captive and processing use, a measure that will enable prospective investors to be energized in 6 months’ time by which time additional RLNG would be added to the system; (vi) electricity be made available to the zero rated industry under a special electricity tariff for the textile industry at Rs. 7/ KWh which is regionally competitive; and (vii) RLNG/system gas be provided to the textile industry at uniform rate of Rs.600/MMBTU across the country.—MUSHTAQ GHUMMAN