Commerce ministry releases refunds of Rs6b

KARACHI:

The Ministry of Commerce has released tax refunds worth Rs6 billion under the Drawback of Local Taxes and Levies (DLTL) scheme.

“Pleased to announce that the Ministry of Commerce has released new refunds worth Rs6,000 million under the DLTL schemes,” said Adviser to Prime Minister on Commerce Abdul Razak Dawood in a tweet.

This includes Rs5.4 billion for the textile sector and Rs600 million for non-textile sectors.

“I hope this will resolve the liquidity issues of our exporters amid Covid-19 pandemic and enable them to enhance exports,” said the adviser.

Two days earlier, Federal Minister for Finance and Revenue Shaukat Tarin had said that the DLTL scheme had been extended and it would not be discontinued while the business community was going to get all its claims on time as funds for the purpose had already been allocated in the budget.

Pending DLTL claims of Rs32 billion of the previous fiscal year would also be settled in the next six months, Tarin said.

Pakistan Businesses Forum Vice President Ahmad Jawad said it was a good move to release refunds under the DLTL scheme, but again the ministry was focusing only on the textile sector, which was not a wise strategy.

“We should support all export sectors in the same manner so that country’s exports may increase in uniformity,” he said. “We must learn from the history and create equal opportunities for all sectors that want to contribute to the national exchequer.”

Jawad said there was no doubt that textile products were in demand internationally in the post-Covid scenario but “we are not sure that this pace will sustain”.

“If it does not, then we will face a tough time again in terms of exports,” he cautioned.

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He stressed that the commerce ministry should provide non-traditional sectors with ample relief.

Expensive energy, sourcing of imports and tariffs, and lack of regional trade have restricted Pakistan’s exports in the range of $22-25 billion.

Pakistan is also not part of any regional trade bloc. Whereas others benefit from trading with neighbours, the South Asia Free Trade Area was defunct with regional trade being no more than 5%, said Jawad.

At a time when the government is releasing the DLTL dues, businessmen are wary of a new tax ordinance.

Employers Federation of Pakistan President Ismail Suttar said the Federal Board of Revenue (FBR) took a decision to amend the Tax Laws Ordinance without consulting stakeholders.

In a statement, Suttar termed the move irrational and unwelcoming because most transactions were carried out through post-dated cheques, and without a grace period of at least 40 days, the business community would not be able to adopt the digital mode.

“It is a total disaster and not the right way to bring the non-compliant sector under the tax net to meet the ambitious target of Rs5.5 trillion tax collection by pounding on the largely compliant corporate sector,” he asserted.

Published in The Express Tribune, September 24^th, 2021.

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