Textile industry: PRGMEA chairman urges release of refunds

Says textile industry suffering due to blocked cash flows

Our Correspondent August 18, 2016
Says textile industry suffering due to blocked cash flows. PHOTO: ONLINE

KARACHI: Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Central Chairman Shaikh Mohammad Shafiq has urged the government to immediately release different refunds claims of the textile industry.

The government committed that the cases having release payments orders (RPOs) up to April 30, 2016 will get payment by August 31, but it did not mention the fate of the remaining cases, Shafiq said in a statement issued Wednesday.

“The textile industry would remain unviable in case the government fails to return local taxes and levies on exports,” he said.

Finance Minister Ishaq Dar, while announcing budget measures for fiscal year 2016-17, gave some incentives of rebate and zero-rated sales tax to top five important textile sectors to enhance their exports in the next two years.

Shafiq said the government needs to take some immediate measures to arrest the decrease in textile exports, which have declined by $1 billion during the last financial year due to massive drop in cotton production.

Imports have increased by 6% in July 2016 and the government could not achieve the exports target during the last fiscal year. The policies of the government have brought Pakistan’s most valuable sector on the verge of collapse, added Shafiq.

The export of readymade garments, however, increased to $2.196 billion in fiscal year 2016 (July to June) from $2.095 billion in same period of last fiscal year, thus showing an increase of 4.83%.

He said that the value-added industry is suffering with low productivity due to shortage of cotton, high energy cost, and discriminating import duties on the industry’s raw material. The PRGMEA chairman said that regional comparison of cost of doing business shows that Pakistan’s wages, interest rates, electricity, gas and water tariffs are much higher.

Published in The Express Tribune, August 18th, 2016.

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