Textile value addition: Govt taking steps to make industry competitive

PM aide insists economy will improve soon due to right policies

LAHORE: The government is taking all necessary measures to make the value-added textile industry competitive and vibrant in the international market, emphasised Adviser to Prime Minister on Commerce, Textile and Industries Abdul Razak Dawood.

Talking to a delegation of the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), led by its Central Chairman Mubashar Naseer Butt, the PM aide said level playing field would be provided to the zero-rated export industry, which gets sales tax relief.

Owing to what he called right policies of the government, the economy of the country would improve in the months to come as exports were now getting better, he said, adding value-added textile products could earn plenty of foreign exchange for the country.

Speaking on the occasion, the PRGMEA chairman pointed out that exports of the value-added garment sector grew 11.22% in 2017-18 despite internal and external challenges. “The sector is a major taxpayer, the largest employment generator in the entire textile chain and exports up to $5.5 billion worth of products,” he said.

He urged the adviser to work on rationalising duty structures and minimise taxes and duties on the import of raw material. The ministry should also hold a meeting to simplify the Duty and Tax Remission for Export (DTRE) scheme, he said.



The ministry should discourage the export of raw material and encourage shipment of value-added goods, he suggested and asked the State Bank of Pakistan to facilitate value-added textile exporters’ authorised dealers in making advance payments for imports against irrevocable letters of credit (L/C) for up to 100% of the value of goods and up to $10,000 per invoice for the import of all eligible items without the requirement of L/C or bank guarantee from the supplier abroad.



“It is requested to cancel the July 14, 2018 circular with immediate effect as you have already resolved the matter in a meeting held on September 6, 2018,” the chairman pointed out.

Regarding duty drawback, he asked the government to announce 100% drawback without the condition of increase in exports and with simple procedure and paperless work.

Expressing concern over the cash flow crunch, Butt asked the government to announce a clear policy to release all pending refund claims. The government should also clear old duty drawback claims of exporters for the period 2009-12 as these were pending since long, he added.

The PRGMEA leadership said different government agencies were harassing the industry and all other mandatory taxes should be merged.

Published in The Express Tribune, December 25^th, 2018.

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