LAHORE: Perturbed over fallout of coronavirus pandemic, the All Pakistan Textile Mills Association (APTMA) on Tuesday demanded the government to extend the date for sales tax returns and payments, suspension of interest charges for the quarter ended March 31, 2020 and deferment of energy bills for March and April 2020.
APTMA’s Executive Director Shahid Sattar in his three separate letters written to Minister for Energy Omer Ayub, Governor State Bank of Pakistan (SBP) Dr. Reza Baqir and Chairman Federal Board Revenue (FBR) Nausheen Javed Amjad stated that the future outlook for textile markets is extremely bleak as currently the bulk of export orders already stand cancelled and where orders have not been cancelled, the foreign buyers are asking for long-term extended credit.
The executive director maintained that western analysts have unequivocally classified textiles as one of the markets that would take years to recover to its pre-Covid-19 turnover. Textile is not an essential commodity and consumers preferences will necessarily change for the worse on non-essential consumer goods, once the market reopen. Sattar added that the domestic market for all practical purposes has completely collapsed with little hope that it would even recover to 50 percent of its pre-Covid-19 levels even by the end of the year. He added that the cash flow crisis is even more acute for indirect exporters who have not been paid anything out of the releases for sales tax etc.
“As a matter of record these indirect exporters have not been paid a dime over the last three weeks and are unlikely to receive any payments from the director exporters,” Sattar stated.
APTMA’s office bearer added that the direct exporters face a very stark choice between payment of salaries and wages (even if vide the new loan scheme), interest charges, energy bills and suppliers of intermediate products and raw materials.
Sattar noted that indirect exporters or manufacturers of intermediate products are already in this crisis situation.
The letters read that in the absence of cash flow from export or domestic sales, it is simply not possible to make payments for interest on all types of loan and advances for the quarter ended March 31, sales tax due on the April 15 (these are for the months of January, February and March) and RLNG/Gas and electricity for at least next three months. Sattar requested the SBP governor that under these grave circumstances advise financial institutions to defer payment of interest on all types of financing for one quarter at least.
“We request that the SBP take this request seriously so that the economy may deal with the Covid-19 situation in an orderly fashion and avoid chaos and panic situations,” the letter to SBP governor reads.
He requested the FBR chairman to extend the date for sales tax return and payments due on April 15, for the textile sector by at least a month and take urgent action in this regard.
Meanwhile, he also requested the federal minister for energy to defer the payment of all energy bills for one quarter at least and take urgent action in this regard.
In a separate letter to Ministry of Commerce (MoC) Secretary Sardar Ahmad Nawaz Sukehra, Sattar stated that the validity of the certificates issued by FBR for special energy rates were valid till March 30. Under the current Covid-19 created circumstances about validity of these certificates to June 30 is critical.
He requested the secretary MoC for extension of validity of these certificates to be notified through the FBR. For fresh applications for regionally competitive energy rates, Sattar stated that the matter has been discussed many times and the new methodology is required to be approved and notified urgently.
