Exporters need fresh impetus to survive: PTEA

Decries zero-rated regime not implemented in true spirit

FAISALABAD: Pakistan Textile Exporters Association [PTEA] Chairman Ajmal Farooq has underscored the need for implementing the zero-rated regime for the country’s export industries.

In a statement, he stressed that policies for the coming fiscal year should be designed in such a way that they could support the export sector, which had been facing stiff competition in the global market and required a fresh impetus to survive.

“For the current fiscal year, exports were made zero-rated, but the policy was not implemented in the true meaning of the word,” he said. For instance, the zero-rating was allowed only on the local purchase of coal and not on imports.



Praising the prime minister’s trade enhancement initiatives, Farooq termed them a positive move for the promotion of exports and demanded their inclusion in the upcoming budget as well.

He suggested that the FBR should establish a mechanism for addressing practical hassle and liquidity problem of refund claimants.

Additionally, the Sales Tax Act and Sales Tax Rules, especially the relevant Section 21, should be amended.

“Sales tax is imposed on the locally produced machinery, whereas machinery import is included in the Eighth Schedule. This exemption should be withdrawn as it is a source of disparity,” he said.

Terming liquidity shortage as a major hurdle to the export growth, the PTEA chairman said the extreme cash flow crunch had squeezed the financial stream. Billions of rupees of textile exporters are stuck in sales tax, customs duty and income tax refund.

“The government should allocate necessary funds in the upcoming budget for the release of outstanding refund claims of exporters,” he said.



While highlighting the high energy cost for industries in Punjab, Farooq said textile companies in the province were still receiving the least amount of gas.

PTEA chairman said textile exporters were engaged in the export of goods and services and since exports were zero-rated, there was no justification to collect sales tax.

Published in The Express Tribune, May 9^th, 2017.

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