Rs25b stuck in duty claims

Exporters say delay in refund blocks working capital flow.

FAISALABAD:

Textile exporters have complained that nearly Rs25 billion is stuck in duty drawback claims with the government, blocking flow of working capital and threatening the country’s exports.

Pakistan Textile Exporters Association Chairman Rana Arif Tauseef, while speaking in a meeting with the association’s members here on Friday, pointed out that some funds, under the research and development (R&D) facility, were yet to be released, which hampered the flow of capital and caused difficulties in business activity.

The R&D incentive scheme was launched after the phase-out of textile quota regime to help boost exports, but was discontinued after two years in 2008. Under the scheme, the government released three to six per cent of taxes and duties paid by textile exporters for R&D activity in the industry.

The government announced another scheme titled Drawback of Local Taxes and Levies (DLTL) in the textile policy in 2009 to facilitate exporters. “Exporters responded positively and total exports jumped to over $24 billion, of which textile accounted for more than $13 billion,” Tauseef said.

However, he said, only 15 per cent drawback claims were paid, leaving the balance stuck with the government.

In addition to these, he said, the cost of production was increasing, making export products uncompetitive in the international market.

Published in The Express Tribune, November 26^th, 2011.