KARACHI: Endorsing the stance of the Pakistan Hosiery Manufacturers Association (PHMA), Federal Minister for Commerce Amin Fahim said, “I strongly supported the viewpoint of the business community to keep the five sectors zero-rated even after the introduction of reformed general sales tax (RGST).”
Fahim said that he cast his vote in favour of the business community on all issues including the RGST, but parliament is where everyone’s voice is presented and the decision of the house will be honoured.
Fahim was speaking to members of the PHMA on Monday.
He said that he fully agreed that the law and order and power crisis were badly hampering businesses in the country. Unfortunately, these issues did not come under his ministry and he had no power to intervene in other ministries, he said.
Offering assistance to the PHMA, he said, “I can arrange meetings with different ministers in Islamabad including finance, water and power, petroleum, interior and others.”
Regarding changes in the duty-free package offered by the European Union (EU) to Pakistan, he said that the foreign ministry and the commerce ministry were in direct contact with the EU. “The ministries are forwarding your views to the EU and trying their best to get maximum possible trade concessions from the bloc,” said Fahim.
The minister also said that he was also planning to summon a meeting of commercial attaches of Pakistan deployed abroad to address the problems faced by the exporters.
He added that the ministry was working out financial implications of that meeting and exporters will also be invited to raise their issues.
Responding to a question, he said that the government was considering banning the export of livestock since the country was already facing a shortfall of animals.
Saleem Parekh, the central chairman of PHMA, said that the bureaucracy was giving the wrong definition of zero-rating to five sectors.
“They want us pay taxes and get refund later, which is not workable.
A big part of working capital will be stuck in this refund system and our output and exports will be affected badly by doing so,” he added.
Javed Bilwani, the chief coordinator for PHMA, said that the government had already been through this in 1996 and had come to the conclusion that the collection of taxes and returning refunds was an expensive exercise for the Central Board of Revenue (now Federal Board of Revenue).
“CBR declared five sectors zero-rated after learning that it was paying back more to the exporters than it had collected from them,” he added.
If the government’s aim is to document the economy by implementing the RGST then the textile is already a documented sector, they said.
Garment manufacturers ask for relief from RGST
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has asked the government to reduce the escalating problems of the readymade garment sector. PRGMEA has written a detailed letter to the federal minister for commerce, Amin Fahim, asking his ministry to help the sector and claiming that the reformed general sales tax can hurt the already fragile sector. Apart from the law and order situation and high interest rates, the letter stressed that the government should be more accessible to businessmen to improve the gap between both stakeholders.
Published in The Express Tribune, November 23rd, 2010.
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