LAHORE: The carpet manufacturers have criticised the Federal Board of Revenue’s (FBR) proposal to surge the sales tax from two percent to five percent in the upcoming budget on handmade carpet industry.
Pakistan Carpet Manufacturers and Exporters Association (PCMEA) Chairman Usman Ghani and Senior Vice Chairman Qamar Zia, in a joint statement, said that as almost 100 percent of the carpets produced in Pakistan are exported, providing more than 800 percent value addition to its product increasing sales tax for subsequent refunds is illogical.
They said despite the facility of GSP Plus status granted to Pakistan, the export of the value-added carpet industry is going down continuously for various reasons and is likely to decline further if unfriendly treatment is meted out to the exporting industries.
The hand-knotted carpet exports have dropped 10 percent to $120 million in 2014 from a peak of $320 million in 2007, they said, and expressed concern over continued declining trend for the industry despite getting free market access to the European markets.
