The Pakistan Textile Exporters Association (PTEA) has lauded the disbursement of drawback of taxes allowed under the prime minister’s trade enhancement initiatives and termed it a positive move of the government towards exports promotion. It, however, has urged the government to implement zero-rating regime in the upcoming budget 2017-18 as billions of rupees of exporters continue to remain locked up in tax refund cases.
PTEA Chairman Ajmal Farooq stated that zero-rating facility was reinstated in July 2016 in order to save the exporters from liquidity crunch, however, some vested interests are undermining government’s efforts. He added that billions are tied up in the refund cycle hurting the textile exporters who are unable to meet their financial needs.
Over Rs40b of textile exporters are held in sales tax refund regime while incentives of over Rs200b under textile policies remain unpaid. Farooq further detailed that Rs10,300 million are outstanding under Export Finance Mark-up Support scheme, Rs1,500 million under Mark-up Rate Support against LTF, Rs19,405 million under Technology Up-gradation Fund, Rs434 million under Reimbursement of EOBI & Social Security Contribution of Women and Handicapped Employees of Textile Industry. Similarly, under drawback of local taxes and levies (DLTL), Rs7,431 million for 2009-11, Rs700 million for 2013-14 and Rs2.5 billion for 2014-15 are still unpaid, he added.
He regretted that exporters are deprived of their working capital since long since the process of getting refunds is burdensome and requires months for refund of their own funds. The result of this is that the exporters have to face huge financial losses when their earned money is stuck-up.
Farooq stated that refund claims of goods exported 12 months earlier remain pending, adding that the government has been unable to meet deadlines on several occasions. To add to that, FBR has rolled back all sales tax refund payment orders (RPO) considering unnecessary objections which adding the miseries of exporters.
The collection of tax and then refunds has proved to be a futile exercise leading to   wastage of time and energy and was also corruption prone, he added.
PTEA’s group leader Ahmad Kamal was of the view that the export industry was the lifeline of national economy and a continuous drop in exports would jeopardize the economy, especially at a critical time when the trade deficit was persistently widening.
