Textile mills insist on tax relief

All Pakistan Textile Mills Association has called upon the government to not impose the value added tax (VAT).


Express September 19, 2010

LAHORE: The All Pakistan Textile Mills Association (Aptma) has called upon the government to not impose the value added tax (VAT) or the reformed general sales tax (GST) on the textile sector.

Aptma says that the tax would not only be damaging for the industry, it would also be useless for the government.

The association also praised the European Union (EU) for relaxing its quota for Pakistani exports and requested the United States to follow suit.

Aptma representatives at a press conference said that the cotton crop has been damaged due to floods, gas and power crisis is at its peak and under such a situation, the tax is not a wise idea. “There are rumours  swirling that the government is imposing VAT but we would like to make it clear to the policymakers that it is not viable for the industry,” said a representative.

“It would only promote corruption in government departments and be helpful for only a few people,” he said, adding that if the tax is imposed, then millers would have to make queues for collecting refunds at Federal Board of Revenue (FBR) offices instead of working.

He also said that if the tax were imposed, then Rs100 billion of the textile sector would be held up with the government.

He said that there is a trade deficit of $10 billion which could be bridged through textile exports. He cited Bangladesh as an example and said that it is ironic that “we export fabric worth $2 billion to Bangladesh and Sri Lanka. Instead of exporting fabric, we should stitch it locally and it could earn us $5 billion,” he said.

He further said that if the US gives free market access to the sector then one million jobs will be created in the country.

Published in The Express Tribune, September 19th, 2010.

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