On Saturday, the textile industry of the country asked the government to expedite the process of payment of tax refunds to allow the millers to achieve maximum efficiency and boost exports significantly.
Conveying the demand, Pakistan Textile Exporters Association Chairman Sheikh Ilyas Mehmood said that huge amounts of cash of the textile industry was stuck in sales tax, local taxes drawbacks besides customs and federal excise duty rebates creating severe liquidity crunch within the industry. Once the cash is released, exporters can deploy the capital into expanding businesses, which in turn will help the country’s exports earnings grow.
Pakistan only held 1.5% of the global textile market share, which means that the industry had strong prospects to grow, Mehmood added.
Pakistan’s textile exports crossed the $13-billion benchmark in the outgoing fiscal year, and would be achieving far better results if circumstances remained conducive.
“The liquidity crunch will result in havoc with the tempo of exports,” Mehmood said.
The textile is industry is aiming to extract maximum benefits from the Generalised System of Preferences (GSP) plus facility, which is expected to be granted in January 2014, and touch $15 billion export target in the current fiscal year, which will all go in vain in the absence of adequate funds.
The PTEA chairman was of the view that the textile sector of the country had taken a severe hit at a time when many of the leading players had invested huge amounts of capital in expansions to meet the growing needs of the global export market.
He said that the energy crisis had almost destroyed the manufacturing and industrial sectors of the economy and resulted in a significant fall in production.
The prevailing economic, financial and industrial crises had badly affected industrial and trade activities, productivity and employment and left the textile sector of the country in doldrums, he said. Exporters were working dire business climate as the cost of inputs was increasing day by day rendering them unable to compete in the international market.
PTEA chairman asked the government to bail out the industry from the crisis by removing hurdles and provision necessary incentives to provide stimulus to textile exports. He requested early released of stuck tax rebates.
Published in The Express Tribune, October 13th, 2013.
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