KARACHI: The Federal Board of Revenue (FBR) is scrutinising tax exemptions granted on textile machinery import and their subsequent impact on exports and industrial expansion to spot any misuse of facility.
The sources said the government granted massive concessions and tax exemptions on textile machinery and raw material imports for the past several years, but preliminary studies revealed that such facilities didn’t reflect in local manufacturing or exports.
The data released by Pakistan Bureau of Statistics showed that machinery import grew 20.6 percent to $556.83 million in the fiscal 2016-17. However, textile exports remained stagnant year-on-year at $12.45 billion in the last fiscal year.
The exemptions and concessions granted to textile sector for balancing, modernisation and replacement and under statutory regulatory authority 1125(I)/2011 amounted to Rs50.5 billion in 2016-17 as against Rs45 billion in the fiscal 2015-16, the Economic Survey of Pakistan document said.
Interestingly, the FBR allowed Rs55.5 billion exemptions and concession in the fiscal 2014/15 when imports of textile machinery fell 25.06 percent to $449.3 million.
