LAHORE: The Pakistan Textile Exporters Association (PTEA) has stressed for the continuation of Duty Drawback of Taxes (DDT) incentive for further three years to boost the value-added textile exports and uplift the economy.
In a statement issued here on Thursday, PTEA chairman Mian Shaiq Jawed said that as a result of growth-led initiatives of the government, country’s exports surged by 13.1 per cent to in July-March 2017-18 over the corresponding period of last year.
He said that the main driver of growth was the value-added textile sector as exports of ready-made garments went up 12.56 per cent during the period in value and 12.85 per cent in quantity while those of knitwear edged up 14.12 per cent in value and 3.52 per cent in quantity during these nine months.
The chairman termed the positive growth in exports as a welcome sign for the economy which is struggling to contain falling foreign exchange reserves; however, he underlined the need for continuity of DDT scheme allowed under the Prime Minister export package. Production of exportable surplus is the need of the hour, he said and added that revival of $4 billion closed production capacity is an enormous challenge.
He urged the government to continue the DDT scheme for further three years. This will generate approximately 10 per cent annual growth in value-added textile exports and would add $1.5 billion each year to the economy.
Mian Shaiq Jawed urged the government for immediate payment of stuck up liquidity in refund regime to get maximum industrial growth and a significant increase in exports as cash flow crunch is negatively impacting the export-oriented textile industry.
Giving details, he said that Rs30 billion of textile exporters are held in sales tax regular refund regime; whereas Rs10 billion are held on account of custom rebate and Rs15 billion are held under income tax credit.
Similarly, incentives allowed under textile policy 2009-14 are also unpaid as Rs20 billion are outstanding under TUF schemes; whereas Rs10 billion under Markup Support and Rs3 billion are stuck up under DLTL scheme. Furthermore, an amount of Rs21 billion is also unpaid against duty drawback of taxes under Prime Minister Trade enhancement initiative.
PTEA Vice Chairman Ammar Saeed terming value-added textile sector as the backbone of the economy with great potential for earning foreign exchange, urged the government for immediate release of blocked refunds to enable the textile exporters to retain their hard-earned export markets at this time of tough competition.
The government, at several times, set deadlines of liquidating the long outstanding refunds of the textile industry but still, huge amounts are outstanding and delay in the release of funds has triggered serious liquidity crunch for cash-starved textile exporters. This is having an adverse impact on the employment and the economy of the country as textile industry is unable to tap its potential in accordance with capacity, he said.
Ammar Saeed said that the regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business. Pragmatic policies in consultation with stakeholders need to be formulated to reduce the cost of business by fixing rates of inputs in line with competing countries in the global market to create a level playing field, he suggested.
The PTEA vice chairman said that finance is imperative to run the wheels of industry and without it, no one could even think to run industry. The government should set its priorities right and accord preferential treatment to boost the exports and generate industrial activities, he demanded.
