PTEA urges govt to remove major obstacles in export growth

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FAISALABAD: The Pakistan Textile Exporters Association (PTEA) has urged the government to immediately remove obstacles affecting export growth. An extreme cash flow crunch is steadily eroding the biggest job providing textile export sector; consequently impairing the sizeable textile potential of the country.

In a statement issued here on Wednesday, chairman PTEA Mian Shaiq Jawed stressed for immediate payments to solve the issues of liquidity in refund cycles as the cash flow crunch is causing a major dent to the country’s exports. He said that in order to accelerate the pace of exports, the government did allow Duty Drawback of Taxes on export proceeds for the textile value chain last year, yet, sufficient funds have not yet been transferred to the State Bank and the exporters are still deprived of the benefits of this incentive scheme.

He said that due to the infrequent release of funds, half of the incentives to be gained from the Textile Policy (2009-14) are yet to be disbursed.

Highlighting the huge pendency in sales tax refund regime, chairman PTEA said that outstanding refunds under section 66 are Rs10 billion; whereas deferred amounts have reached to Rs19 billion and regular claims till January 2018 are of Rs17 billion. Similarly Rs8.5 billion is pending on account of custom duty claims.

Mian Shaiq Jawed demanded the immediate payment of all outstanding refund claims to boost exports. He said that the Federal Board of Revenue (FBR) should come up with mechanisms for ending practical hassles, liquidity problems of refund claimants, and frivolous litigation pertaining to refunds.

Pointing out the heavy duties on coal import, chairman PTEA said that an Advance Income Tax at 5.5 per cent and Custom Duty at 5 per cent are levied on import of coal across the board. Coal fired machines worth billions of rupees have been installed in the textile industry particularly in Punjab, to cope with the energy crisis; however heavy duties on coal at import stage are an added financial burden.

He demanded to allow coal import under SRO 327 for the export oriented textile industry. He said that it was principally agreed at different forums that the status of the supplier at the time of transaction will be reckoned for initiation of recovery proceedings.

Mian Shaiq Jawed stressed for an amendment in the Sales Tax Act and Sales Tax Rules. He termed high production cost as a strong barrier in export growth. He further explained that high priced fuel creates a chain effect to ultimately increase production cost of exported goods as industries in Punjab are supplied high-priced RLNG based on USD based tariff; whereas industries in other provinces are supplied system gas based on PKR tariff. He demanded equal prices of gas for the industry across the country and withdrawal of surcharges to bring the power tariff at par with regional rates.

PTEA Vice Chairman Ammar Saeed was of the view that industrial production is not in accordance with the built up manufacturing capacity. Due to this underutilization, the country is not fetching the full potential of foreign exchange earnings.  There is need to enhance the industrial production to accelerate economic growth and generate vast opportunities for employment.

He demanded that Government should concentrate upon some truly visionary steps and address genuine concerns of the industry with innovation and bring extraordinary solutions in the upcoming budget.