KARACHI
SR. Vice Chairman All Pakistan Textile Mills Association (APTMA) Zahid Mazhar, said the government has once again lost the opportunity to revive the national economy through Federal Budget 2017-18, saying that the current budget has failed to support the export oriented industries including textiles.
In a statement issued to the press Zahid Mazhar said that the government has failed to bring in fundamental reforms to encourage exports, industry and employment. He said that the government has not announced any measures to generate employment, promote exports and encourage import substitution. The industry had requested reduction in turnover tax. On the contrary the government has increased turn over tax from one per cent to 1.25 per cent. He pleaded for reduction in the minimum turnover tax to 0.25 per cent. The government has imposed two per cent further tax on supplies to unregistered persons, it should also do away with the imposition of two per cent further tax on the textile industry since the industry gets burdened with two per cent additional cost as the end users do not pay this tax.
Presently the system of zero rating is distorted and is actually not zero rating in true spirit. It needs some changes because there is no zero rating on some of the inputs. He requested the government that before passing the Federal Budget from the National Assembly it should ensure zero rating of all inputs including packaging materials, spare parts and fuel and energy in true spirit.
The government has again extended delay in arranging timely refunds of sales tax which is crippling the liquidity of the industry, which will further lead to disastrous consequences
He further said that unfortunately the government’s priorities do not include the textile industry which is earning about 60 per cent of the foreign exchange through exports for the country and providing more than 38 per cent employment in the manufacturing sector has been hit hard because of energy shortage, high price, and duty on the import of raw materials including cotton and synthetic fiber. The situation is further aggravated due to high cost of energy both gas and electricity as compared to the regional competitors. The government should remove the levy of Gas Infrastructure Development Cess (GIDC) on the system gas. He further demanded that the government provide gas at the regionally competitive rate of Rs. 400/MBTU as was earlier announced by ECC in November 2016 but was not implemented.
Mazhar said that the textile industry demands practical measures and not mere announcements. He said that the export-led growth package announced by the prime minister in January this year for textile industry was merely eyewash, as only an amount of Rs one billion has been released by State Bank of Pakistan so far
Since the country has already suffered huge losses due to failure of cotton crop for the last two consecutive years, the sr. vice chairman APTMA further demanded the government to ensure availability of raw materials to the industry by continuing the policy of import of cotton without duty and sales tax and review its decision to re-impose custom duty and sales tax on import of cotton as it will be suicidal for the textile industry.
Zahid Mazhar said that the trade deficit this year is expected to reach US 31 billion as imports are projected to close at $51 billion as against estimated exports of $20 billion. However the textile industry of Pakistan is capable enough to reverse this negative trend
He said that the country has a potential to reach annual GDP growth of 8% provided the government immediately starts giving attention to the export sectors specially the textile industry.
