ISLAMABAD: Federal government all set to announce another package to textile sector soon, Pakistan Today learnt reliably.
Ministry of Commerce and Textile has twice briefed Prime Minister Shahid Khaqan Abbasi on this issue in recently, subsequently, some seven proposals have been finalised.
The upcoming package would be related to cost of doing business as the textile sector was vigorously pursuing to get the relief in electricity and gas rates.
It has been proposed that electricity rate for the textile sector should be decreased to Rs 1.45 per unit. Presently the rate is approximately Rs 11 per unit. Meanwhile, the prices of regasified liquefied natural gas (RLNG) for textile sector must be decreased to Rs 300 MMBTU, currently, the gas tariff is Rs 1001 per MMBTU.
It has also been proposed that gas rates should also be decreased to some extent, presently the rate is Rs 600 per MMBTU.
Commerce Ministry has also proposed that government immediately pay Rs 35 billion sales tax refunds and approximately Rs 17 billion customs duty drawbacks to the textile sector.
The ongoing textile policy liabilities have reached to Rs 15 billion, it has been suggested that the government should also address this issue. In addition, it has also been proposed that the government should implement a zero rating on packaging material.
Furthermore, it has been purposed that turn over limit income tax for power looms should be decreased from 1 million to 0.5 million as well as the turnover on electricity is 0.8 million, it should further be mitigated, the proposals indicates.
One officer told that the government has taken the decision in a bid to increase the exports of the country as the decision to decrease the industrial tariff will help reduce the cost of doing business.
The government had announced Rs 180 billion trade enhancement package in January last year, out of which Rs 160 billion was set aside for the textile industry. However, Ministry of Finance has so far released Rs 16 billion under the prime minister textile package. Officials at the Ministry of Commerce claim that exports of the country have shown an upward trend in the first six month due to this package.
It is pertinent to mention here that Pakistan’s exports have plunged down to $ 20 billion in last fiscal year which stood at $ 25 billion under Pakistan People’s Party’s (PPP) government.
Pakistan Hosiery Manufacturers & Exporters Association (PHMA) Chairman Javed Bilwani while talking to Pakistan Today said that we had demanded from the government to equal the electricity and gas rate with neighbouring country Bangladesh. Pakistani exports are getting 2 per cent profit margin on products whereas the Bangladesh and Vietnam’ business community get 15 to 20 per cent margin.
He further added that our exports have increased by a whopping 10 per cent in the current fiscal year and it has the capacity to increase more.
