Textile sector holds govt responsible for export woes

Presses for immediate release of tax and duty refunds

LAHORE: Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Chairman Adil Butt has expressed concern over the decline in textile exports, which have dropped 1.98% in the first 11 months of the current fiscal year.

Along with the fall in textile exports, Pakistan's trade deficit has swelled 42.12% to about $30 billion compared to $21.1 billion in the same period of previous fiscal year. Butt held the government responsible for the constant decline in textile exports because of delay in release of tax refunds of exporters and asked it to immediately release all the pending sales tax refund and Customs rebate claims as well as withholding tax claims.

"The drop in textile exports comes during a turbulent period for textile manufacturers as they await the promised government incentives for the export sector including disbursement of an export promotion package worth Rs180 billion and smooth receipt of sales tax refunds."

The year-on-year growth in exports of most of the textile products was negative including towels, cotton clothing and bed wear, which showed double-digit declines, he said while quoting the Pakistan Bureau of Statistics (PBS).

Butt hit out at the government for running a headless textile ministry and for increasing the turnover and sales tax to 1.25% and 6% respectively, adding none of the textile industry's major proposals had been incorporated into the budget.

Out of the Rs180 billion promised in the incentive package for the export sector, just Rs4 billion has been released, despite chest thumping about the release of Rs24 billion.

The package is aimed at making the industry cost-effective by removing duties on raw material (cotton and man-made fibres) among other measures.

Textile exports from July-May (2016-17) were recorded at $11.234 billion compared to $11.461 billion in the corresponding period of 2015-16.

Exports of cotton yarn and cotton cloth fell 3.64% and 5.81% respectively. Similarly, raw cotton and yarn (other than cotton yarn) exports showed massive drops of 47.14% and 27.32% respectively.

Other items were not too far behind with knitwear, towels, art, silk and synthetic textile losing a combined $51.798 million in export value over the course of the year.

Published in The Express Tribune, July 1^st, 2017.

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