Textile exporters have demanded a level playing field with regional competitors in the forthcoming Textile Policy 2020-25 coupled with a continuation of existing utility prices.
In a statement on Friday, the Pakistan Hosiery Manufacturers and Exporters Association (PHMA) stressed that energy rates for industries should be brought at par or below the tariff prevailing in the competing regional countries.
To discuss the proposals, officials from PHMA held a meeting with representatives from the Ministry of Commerce and Trade Development Authority of Pakistan (TDAP).
During the meeting, PHMA Chief Coordinator Jawed Bilwani highlighted that to enable the textile industry to compete effectively against regional countries, electricity rates of 7.5 cents per KwH and re-gasified liquefied natural gas (RLNG) rates of $6.5 per mmbtu should continue.
"Utility rates of industrial sector should be reviewed on an annual basis and if rates in the regional countries fall, the tariff for domestic utilities should also be brought at par with it," he said. "If RLNG rates are reduced internationally from existing $6.5 per mmbtu, then this benefit should be passed on to manufacturers and exporters in the textile value chain."
He added that the Duty Drawback of Taxes (DDT) and Drawback of Local Taxes and Levy (DLTL) schemes were introduced by the government due to exporters' demand to redeem their local taxes paid on export consignments because earlier there were no taxes and levies on exports.
Hence, reimbursement of DDT and DLTL to exporters is not an incentive from the government rather it is the amount paid back to traders against taxes, he added.
Bilwani urged for automation of DDT and DLTL system so there would be no need for exporters to apply for refunds.
"Upon receipt of export proceeds, the DDT and DLTL payment should be electronically transferred to exporters' account without human involvement."
He was of the view that in this manner, the payment shall not be time-barred.
He added that to boost ease of doing business, Long Term Financing Facility (LTFF) on purchase of machinery and BMR, Export Finance Scheme (EFS), LTFF for infrastructure development and LTFF for exporters and indirect exporters should be continued.
The Ministry of Commerce is in the process of finalising the Strategic Trade Policy Framework and Textile Policy 2020-25 for which TDAP has been tasked to seek sector-specific suggestions and sector-wise projections for exports of the next five years.
Published in The Express Tribune, August 8th, 2020.
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