PTEA lauds govt for releasing Rs5b funds

Clearing duty drawback of taxes

FAISALABAD-The Pakistan Textile Exporters Association (PTEA) lauded the release of Rs5 billion to clear claims of Duty Drawback of Taxes allowed under Prime Minister’s Trade Enhancement Initiatives.
This is a positive move of the Government which will definitely give necessary flip to textile exports, said Chairman of Pakistan Textile Exporters Association Shaiq Jawed. He appreciated the Government on release of funds for payment of outstanding claims terming it a positive step for sustainable growth. Payment of outstanding duty drawback of taxes and technology upgradation fund schemes would help mitigate the financial stress of textile exporters; however he urged for immediate payment of stuck up liquidity in sales tax, income tax and customs rebate refund regime to get maximum industrial growth and significant increase in exports. He said cash flow crunch is causing major dent to country’s export oriented textile industry.
He said that Rs46 billion of textile exporters are held in sales tax refund regime; whereas 8.5 billion rupees are held on account of custom rebate and 15 billion rupees are held under income tax refund. He said that under sales tax refund regime, claims of Rs10 billion are lying unpaid under section 66; whereas claims of Rs19 billion are pending under differed amounts and an amount of Rs17 billion is pending under regular RPOs.
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 release of funds had triggered serious liquidity crunch for cash starved textile exporters, he said. It is creating 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.
Finance is imperative to run the wheels of industry and without it, no one could even think to run industry, he said. Government should set its priorities right and accord preferential treatment to boost the exports and generate industrial activities, he demanded.
PTEA vice Chairman Ammar Saeed was of the view that release of funds of Rs673 million for payment of duty drawback of taxes & levies 2014-15, Rs500 million for DLTL 2015-16 and Rs500 million for payment of claims of DLTL 2016-17 will help the value added textile industry in further promotion of exports. Terming value added textile sector the backbone of the economy with great potential for earning foreign exchange, he 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. “Our industrial production is not in accordance with the built up manufacturing capacity. Due to this underutilisation, the country is not fetching full potential of foreign exchange earnings. There is need to enhance the industrial production to accelerate economic growth and generate vast opportunities of employment. Government should concentrate upon truly visionary steps and address genuine concerns of the industry with innovation and bring extraordinary solutions,” he said.
Regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business, he said. 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.

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