PTEA wants DDT incentive to continue

Industrialists say textile sector needs support to boost exports

FAISALABAD: The Pakistan Textile Exporters Association (PTEA) has stressed the need for continuing the Duty Drawback of Taxes (DDT) incentive for another three years to boost value-added textile exports.

The DDT incentive has had a positive result as textile exports recorded a 7.7% growth year-on-year to $9.99 billion in the first nine months of 2017-18.



PTEA Chairman Mian Shaiq Jawed said that as a result of growth-led initiatives of the government, exports surged by 13.1% in July-March 2017-18 over the corresponding period last year. The main driver was the value-added textile sector as exports of ready-made garments went up 12.56% during the period in value and 12.85% in quantity while those of knitwear edged up 14.12% in value and 3.52% in quantity during these nine months.

Exports of bedwear went up 4.99% in value and 3.16% in quantity whereas exports of made-up articles, excluding towels, increased by 7%.

He termed the positive growth in exports as a welcome sign for an economy struggling to contain falling foreign exchange reserves; however, he underlined the need to continue the DDT scheme allowed under the PM package.



“Production of exportable surplus is the need of the hour,” he said, adding that revival of closed production capacity is a challenge. Only an enabling environment can attract prospective investors to undertake new investment initiatives, he asserted.

The PTEA chairman urged the government for immediate release of stuck liquidity as cash flow crunch is negatively impacting the export-oriented textile industry.

Giving details, he said that Rs30 billion are held in sales tax regular refund regime; whereas Rs10 billion are held on account of customs rebate and Rs15 billion are held under income tax credit. Similarly, incentives allowed under textile policy 2009-14 are also unpaid as Rs20 billion are outstanding under TUF schemes; whereas Rs10 billion under mark-up support and Rs3 billion are stuck up under the DLTL scheme. Furthermore, an amount of Rs21 billion is also unpaid against duty drawback of taxes under the PM trade enhancement initiative.



Vice Chairman Ammar Saeed also urged the government for immediate release of blocked refunds to enable the textile exporters to retain their hard-earned export markets at this time of tough competition. The government, at several times, set deadlines of liquidating the long outstanding refunds of the textile industry but still huge amounts remain outstanding. This is having an adverse impact on employment and the economy of the country as textile industry is unable to tap its potential, he said.

Regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business. Pragmatic policies in consultation with stakeholders need to be formulated to reduce the cost of business by fixing rates of inputs in line with competing countries, he suggested.

The government should set its priorities and accord preferential treatment to boost exports and generate industrial activities, he demanded. 

Published in The Express Tribune, May 20^th, 2018.

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