Incentives, tax exemptions are on the rise, but exports are not

Survey says Pakistan’s revenue from major export markets has remained stagnant

KARACHI: Despite incentive packages, government’s promises to assist and industries’ cry for help, Pakistan’s export sector continued to disappoint.

Close to half a billion dollars were lost due to tax exemptions for the export-oriented sectors during the first nine months of the outgoing fiscal year, according to the Pakistan Economic Survey 2016-17. Yet, Pakistan’s exports dropped 2.29% in dollar-value during 10 months of the fiscal year, according to the Pakistan Bureau of Statistics, decreasing from $17.31 billion in 2015-16 to $16.91 billion in 2016-17.

“The government has sustained Rs50.4 billion in losses due to reduced rates charged from five export-oriented sectors which include textile, carpets, leather, sports and surgical,” read the Economic Survey 2016-17.



The survey added that Pakistan’s major export markets, including the US, China, the UK, UAE and France, have seen “no visible change”. On the other hand, exporters have failed to penetrate new markets. The survey exhibited that the composition of Pakistan’s exports more or less remained the same during the fiscal year compared to previous years which showed high concentration in few items like cotton and cotton manufactures, leather, rice and a few more items.

“The first three categories account for 71.8% of total exports during the July-March period of the ongoing fiscal year, with cotton and cotton manufactures alone contributing 59.6%,” read the survey.

“Traditionally, the contribution of these three categories was 71.6% during the same period last year and 68.7% during the same period two years ago. Exports in these few items are a major factor for lower export earnings,” the survey added.



Also, monthly exports for the period under review remained mostly below the corresponding months of last year, averaging at $1,681 million per month against an average of $1,747 million last year.

All Pakistan Textile Mills Association Senior Vice Chairman Zahid Mazhar has said that textile exports in the first 10-months have dropped by 1% to $10.296 billion compared to the corresponding period of last year.

Published in The Express Tribune, May 26^th, 2017.

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