LAHORE - Pakistan Tanners Association central chairman Sheikh Saqib Masood has said that, despite negative growth rate of Pakistan, the government has imposed duty on import of hides and skins, which would further decline leather exports.
“The major reason for decline in growth of this second largest export sector was mainly unfriendly policies of the government and persistent energy crisis and frequent loadshedding of electricity and gas,” he said. He explained in detail that leather processing is continuous process industry and electricity shutdowns not only cause serious damage to leather in process but also have adverse effects on its quality. Due to this serious problem, the leather sector is facing stagnation in its growth for last 6 years, he added. He said chronic stagnation of leather sector started since 2007-08 though there was an increase of 12.67 percent in export of leather and leather products in July-April 2014 but the country was lagging far behind in the region. China’s export stood at $28.17 billion in 2007-08, exports of India stood at $4.87 billion in same period, Bangladesh’s exports at $0.379 billion in same period and Pakistan’s exports stood at $1.220 billion in 2007-08. But in 2012-13, exports of China stood at $42.40 billion, India at $5.90 billion, Bangladesh at $1.3 billion and exports of Pakistan stood at $1.142 billion with a negative growth of -6.39 percent.
Government should include raw hides and skins in the sixth schedule of Sales Tax Act 1990 like cottonseed (raw cotton). Sheikh Saqib said that the sector represents as mother industry of leather garments, footwear, gloves and leather goods producing world’s finest quality leather and leather products. PTA chairman said that the leather industry having tremendous growth potential will become 3 billion dollar industry in the next 3 years if encouraging government support with provision of level playing field is ensured.
Leather industry contributes its share in billion of rupees to the national kitty regularly through payment of Customs Duty, Sales Tax, Income Tax, Withholding Tax, Export Development Surcharge, Tax on Services, Employees Oldage Benefit Institution, Social Security etc.
During the last six years of export history, the leather exporters paid $15.804 million towards Export Development Fund i.e approximately $2.634 million per annum. Sheikh Saqib said the value added leather industry was very much perturbed due to un-business friendly policies of the government besides power and gas load shedding.