PHOTO: INP
According to a press release, Mazhar said that the government must accommodate the export-oriented industries.
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“The government should avoid imposing any additional tax on the industry because if it does, then that would be the final nail in the coffin for the export sector,” he said.
“The upcoming budget can prove to be a game-changer for Pakistan’s economy if it encourages exports, industry and employment generation,” he added.
The Aptma senior vice chairman said that during the first 10 months of the ongoing fiscal year, the trade deficit has already jumped to $26.55 billion, up 40% from $18.95 billion in the corresponding period of previous fiscal year. He added that if the trend continues, trade deficit for the current financial year would reach to a record level of $30 billion.
Meanwhile, textile exports during the same 10-month period have dipped to $10.296 billion, down 1% compared to the corresponding period of the previous year. At present, the industry is running below its installed capacity although it has a potential to increase the country’s exports to $30 billion.
“The textile sector is battling hard for its survival in the global market, which includes problems such as severe competition from neighbours, high cost of doing business and high cost and shortage of raw materials.”
According to the Aptma official, the industry was marred by highest utility tariff for both gas and electricity in the region, along with the highest corporate tax in the region. He demanded the government to provide system gas at regionally competitive rate of Rs400 per mmbtu across the country and remove the levy of Gas Infrastructure Development Cess, adding that the rate of Regasified Liquid Natural Gas should also be reduced.
Regarding the availability of raw material, Mazhar said the government should ensure availability of raw materials to the industry by allowing duty-free import of cotton and polyester staple fibre.
“The country has already suffered huge losses due to the failure of cotton crop for the past two years,” he said. “Therefore, it is imperative to continue with the policy of import of cotton without duty or sales tax because it will be suicidal to re-impose them.”
The senior vice chairman requested the government to ensure zero-rating on all inputs in true spirit, including packaging materials, spare parts and fuel.
Pakistan is now a $300-billion economy
He added that payment of all pending refunds of sales tax, which is more than Rs200 billion in worth, should be made without any delay. He also demanded to reduce the turnover tax to 0.25% from existing 1%.
Mazhar concluded that the country has a potential of an annual Gross Domestic Product growth of 8%, but if the aforementioned issues are not addressed in the upcoming budget, then the dream of economic growth might turn into a nightmare.
Published in The Express Tribune, May 25th, 2017.
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