PRGMEA welcomes zero rated sales tax policy

ISLAMABAD: Shaikh Mohammad Shafiq, central chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA)  said that PRGMEA have warmly welcomed the zero rated sales tax policy for country’s five export sectors i.e. value-added textile, carpet, surgical, sports goods and leather.

He also appreciating to reduce export refinance rate from 4.5pc to 3pc.

The Finance Minister, Senator Mohammad Ishaq Dar made a long enduring speech inthe national assembly and said that the refunds cases having release payments orders (RPOs) up to April 30, 2016 will get payment in August 31, 2016 but did not mention about the fate of remaining cases. According to Shaikh Mohammad Shafiq under 20pc of the actual outstanding funds were issued RPOs. He also pointed out that the same statement was given last year, but exporter didn’t get any refund.

According to the PRGMEA Chief country’s exports dropped by 13 per cent in the first nine months fiscal year. It is now the need of the hour for the Pakistani government to develop a coherent plan that allows some sort of exemption/concession to the garment sector to arrest its decline. As cut-throat competition with countries, like Vietnam, Bangladesh and China, is giving tough time to Pakistan’s exporters.

In a statement, Shafiq said the Government must realize that time has gone when raw material used in textiles (yarn, fabric etc) could be exported. This trend is not going to continue and it is the reason Pakistan is facing serious downfall. Countries have to use their raw material and export only possible in the form of finished products – garments. “We must believe in concept that countries have to be completely vertically integrated to use their raw materials in completely finished product,” he said in the statement.

“The textile industry fetches more than half of export revenues and it has been totally ignored by the government. How will anyone make new investment when their existing investments are in jeopardy?” he wondered.

“With one-third capacity already closed and one million jobs lost our industry is fighting for its survival. We expected the finance minister to take steps for the revival of the closed capacity but he didn’t,” he said.

He concluded, the textile industry would remain unviable in case the government failed to return local taxes and levies on exports.

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