KARACHI: The resistance of exporters over withdrawal of zero-rated regime continued as they threatened further protests if the facility was not reinstated.
Addressing a protest on Saturday, Karachi Chamber of Commerce and Industry (KCCI) former president Zubair Motiwala said that the abolition of SRO 1125 (zero-rated regime) is a conspiracy to destroy export industry, spark unemployment, diminish foreign exchange earnings and deteriorate the economy.
He further stated that if the government did not reverse its decision they would observe a ‘no export. Criticising the federal budget announced for fiscal year 2019-20, he said that it was against the manifesto and export policy of Pakistan Tehreek-e-Insaf (PTI).
Representatives of the five zero-rated export sectors; value added textiles, sports goods, surgical products, leather and carpet, held protests and press conferences in Karachi, Lahore, Faisalabad, Sialkot, Multan, Gujranwala and Kasur.
“Previous governments imposed 1-2% sales tax on the export-oriented sectors, however, imposition of 17% sales tax by the incumbent government is a disaster, which will destroy the entire value added export sector, industrial chains and allied industries,” he added.
He was of the view that the Federal Board of Revenue (FBR) had placed the entire burden on the export industry to hide its inefficiency in broadening the tax net. He stressed that imposition of 17% sales tax would lead to closure of the entire industry.
“It will also compel foreign buyers to shift to other regional countries, which will drastically hurt Pakistan’s economy,” he underlined.
The export industry is undergoing a crisis as more than Rs200 billion worth of tax refunds of exporters are stuck up with the government.
Discontinuation of zero-rated regime would cause 14% liquidity of exporters to be stuck up every four months as one shipment takes four months for completion, said Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Chairman Muhammad Jawed Bilwani.
He pointed out that this decision depicted that the Ministry of Finance and the FBR were aiming at collecting interest free money in shape of sales tax and to meet tax revenue targets but this would put the country’s exports at stake.
Published in The Express Tribune, June 16th, 2019.