The culture of forming committees on pressing issues is the best option for the government to delay any solution. Textile exports of the country have been falling for the last five years as its share of trade has fallen from 2.2 percent to 1.8 percent in the global market. If the prevailing trend continues, the share of textile trade will fall to 1.5 percent in the next five years. After a meeting with the representatives of the All-Pakistan Textile Mills Association, Finance Minister Ishaq Dar has constituted a committee to resolve the issues of the textile industry. This vital industry is facing many challenges, including imposition of surcharge on electricity bills, settlement of sales tax refunds, anomalies in tax system and unbridled yarn import. Dar assures the businessmen that the matter of sales tax refund would be resolved on priority basis and seeks the filing of refund claims by August 31. According to experts the rising cost of doing business has adversely affected the textile exports despite achieving GSP-Plus status from the European Union.
The Senate Standing Committee on Textile Industry has blamed the energy crisis as a major cause of decline in overall domestic productivity, including textile output. It also led to decline in foreign direct investment. According to All Pakistan Textile Mills Association Chairman SM Tanveer, the government will collect Rs 72 billion under tariff rationalization surcharge, Rs 38 billion under Gas Infrastructure Development Cess and Rs 60 billion from export of textile products. The government policies are adding to the woes of the textile industry as billions of rupees refund claims are pending with the finance ministry. According to the association, the cost of doing business in Pakistan is much higher than its competitors such as China, India and Bangladesh.
Pakistan’s share of textile products in the global market was 2.2 percent five years ago, which is also not admirable as the country is a major cotton producer in the world and it should have a lion share in the global market. Bangladesh has leading garment industry whereas Pakistan is also not less than any country with highest production capacity. The textile manufacturers need maximum facilities and minimum risks to compete in the world market. Therefore, the government needs to overcome energy crisis and introduce tax relief for the textile industry. Many Chinese business tycoons are willing to establish joint ventures with their Pakistani counterparts and this could be only possible when security situation is improved, tax relief is given and energy crisis is over.
