LAHORE: The Pakistan Hosiery Manufacturers Association (PHMA) on Tuesday rejected 17pc sales tax on the export industry of textile, leather, carpet, surgical and sports. The tax imposed through the Federal Budget 2019-20.
PHMA Chairman Adil Butt expressed serious concerns over the withdrawal of zero-rated facility for the five key export sectors “at a time when refund claims of Rs300 billion were already stuck up”.
In an emergent meeting called after the announcement of the budget, the PHMA chairman said withdrawal of sales tax on zero-rating for five key sectors would adversely impact the country’s exports, which were already facing many challenges.
“This will also increase the cost of doing business, which is already very high in Pakistan as compared to regional countries.”
Other PHMA leaders on the occasion asked the government to find new avenues to enhance its revenue instead of damaging the export sectors.
They said the refund claims of exporters amounting to Rs300 billion were already stuck up, creating liquidity crunch for the industry, while uncertain economic environment has slowed down the investment to almost zero. Moreover, they added, the rupee devaluation by more than 30pc has failed to increase exports.
Noted industrialist Abdul Hameed said that the five zero-rating sectors contribute 70pc in the exports of Pakistan, helping the country significantly earn foreign exchange and provide employment to the skilled and unskilled labour force.
The participants of the meeting suggested the government facilitate industrialisation in Pakistan, particularly the agro-based and value-added industries for the enhancement of exports.
They said the industry was seriously concerned on the move, as the end exporter would be the worst hit due to the stuck-up refunds.