The Pakistan Hosiery Manufacturers Association (PHMA) has hailed the Ministry of Textile Industry for notifying the revised PM’s Package for exporters immediate after the approval of Economic Co-ordination Committee (ECC) of the Cabinet under which 50 percent of the rate of drawback of local taxes and levies shall be provided without condition of increment.
The newly-elected chairman of PHMA Dr. Khurram Anwar Kh also proposed the government to release funds to the central bank for immediate payment of duty drawback of taxes to the hosiery exporters as the immediate payment of all outstanding refunds of sales tax could save the industry.
PHMA chairman said that value-added textile sector appreciates the government for accepting its genuine demand to provide 50 percent of the export package incentive for eligible textile and non-textile sectors on the same terms as for the period from Jan to June, 2017 without condition of increment.
He said that it is the right decision that remaining 50 percent of the rate of incentive would be provided if the exporter achieves an increase of 10 percent or more in exports.
He lamented that value-added textile exporters were battling hard for their survival in the global market in the face of severe competition with the regional countries. Terming funds blockage as main cause of continuous drop in exports, he said that export industry was unable to tap its potential in accordance with capacity.
He said the government initiative, if implemented timely, will surely provide relief to the exporters who are presently facing severe liquidity crunch. He, however made it clear that these measures are short-term solution, as the government would have to provide conducive environment by reducing cost of inputs to surpass the previous record of annual exports of $26 billion.
Moreover, he requested the authorities to resolve the issue of energy tariff differential with regional countries and even within the country. He said that export industry was the life line of economy and any disruption would have devastating impact on the industry causing productivity loss, job losses and industrial unrest. Dr. Khurram said that their major portion of working capital was stuck up with the FBR, as the textile exporters had not received their drawback of Local Taxes and Levies outstanding for the last many years.
He said the textile industry will remain unviable in case the government fails to return local taxes and levies on exports. He urged the government to act decisively and rescue the value-added textile industry from financial crisis, as worst-ever cash flow crunch had brought the country’s largest industry to the verge of disaster. He urged the government to take on board the real stakeholders while finalizing the Duty Drawback of Taxes Order 2017-18 and share with them the draft for review.