Textile exporters’ liquidity crunch hinders Pakistan's exports

Industry official urges government to release refunds without further delay


Imran Rana July 12, 2020
PHOTO: REUTERS

LAHORE:

Textile exporters have expressed immense distress as they are facing severe liquidity crunch due to the imposition of 17% GST as the government has yet to issue refunds.

The unnecessary delay in release of tax refunds is also causing hurdles in export production, Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Central Chairman Chaudhry Salamat Ali.

He said that the government’s anti-export decisions have disturbed exporters. Following the outbreak of the coronavirus, the global business has shrunk and textile exporters are faced by extreme uncertainty and they are unable to decide on the future of their businesses as the government has left them without any help in these critical times.

He said that exporters were worried that despite commitment and assurances, the government was not able to release the refunds in a timely manner. He also lamented that a major demand of the sector to restore the zero-rating regime and reduce GST was also ignored in the recent budget for fiscal year 2020-21.

“Exporters are also apprehensive about the fate of their other refunds of income tax, customs rebate, duty drawback as well because still a huge amount worth billions of rupees lying with the government, which has not been released.”

The PHMA official urged the government to support the textile industry and release all pending refunds in one go.

He said that to achieve breakthrough in enhancement and development of exports, it is extremely necessary that the government facilitate the export sector by introducing export-friendly policy.

He added that the five export-oriented sectors have been highly aggrieved due to the withdrawal of SRO 1125 and imposition of 17% sales tax on exports, which the government imposed in the last budget.

He added that the textile sector was reeling from anxiety as the government had disregarded its recommendations.

He also demanded that the government review its decision and restore zero-rating on GST, no payment no refund system, for textile sector or reduce GST from 17% to 4%.

Apart from providing employment to a huge number of people, the textile sector also supported more than 40 allied industries.

He added that the government will be responsible for closure of industries, flight of capital, and massive unemployment if these issues are not resolved.

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