ANWAR KHAN

Karachi: High cost of production with misdirected tax policies contribute in a wide range imports of textile clothing, as industries now favor trading than manufacturing for local markets, exporters said on Wednesday.

The country's over 80 percent revenues that come from taxation depend on imports while tax collections from the local production is nearly non-existent, according to the exporters, who blame the FBR for running after meeting targets than stabilizing the economy.

Pakistan's import of used clothing has grown by 8 percent or US$0.855 million to US$13.601 million in Nov 2017 from US$2.746 million in Nov 2016, according to Pakistan Bureau of Statistics. "From children clothing to ladies garments, Pakistan imports every textile item from over 50 percent to 99 percent," Javed Bilwani, Chairman Pakistan Apparel Forum, said.

Industrialists, he said, are turning their manufacturing units into trading zones for return on selling garments is 'much higher' than making such products that is widely subjected to all kind of taxations and huge input costs. "No favorable environment for manufacturers exists in Pakistan," he said, adding that "imports of clothing are cheaper than producing them locally."

Pakistan imported worn-clothing with an increase of 7 percent or 2326 metric tons to 36,762 metric tons in Nov 2017 from 34,436 metric tons in Nov 2016. "This will grow further keeping in view the unchecked rise in population in the country," Bilwani said, adding that such unneeded imports drive the country to the economic instability. He said that the local shopping malls are flooded with imported ladies' wear up to 99 percent and children wear over 50 percent, which were produced in the country decades back. "Lawrancepur was a textile mill that would produce soothing clothes for the country, which eventually ceased to the higher cost of inputs and poor taxation policies," he said, adding that even lawn fabric is now totally imported.

Instead, spreading manufacturing units, the governments rather facilitate imports that not only take away a huge share of foreign reserves but also deprive youth of jobs, he said. "Jobs and foreign reserves can only be attained if there is a widespread industrialization drive with easy taxation policies and lower input cost," he was of the view.

He said that the country's overall textile exports stand stagnant but imports are finding ways into the local markets. "If such an unfavorable policy continues then who is going to invest in a sector which would never pay back," he said, adding that "profit margin for exporters on textiles is within single digit ranging between 1 and 5," Bilwani added.

Imports hurt the local manufacturing sectors even textiles, Chairman PAF said, asking the government to revisit its taxation policies that is just to meet revenue targets. He said that the country will have to scale back its imports sooner or later.

Pakistan's import of worn-clothing reached $65.334 million in July-Nov 2017 from $64.778 million in July-Nov 2016, up by 2 percent or $0.556 million. Import volume of used clothing soared by 7 percent or 10,948 metric tons to 177,971 metric tons in July-Nov 2017 from 167,023 metric tons in July-Nov 2016, the statistics show.