KARACHI: The value added textile exports would plunge by approximately 20 percent further if the sales tax imposed on the exports is not withdrawn.
The exports have declined by 13.42 percent in the first quarter of the current fiscal year. The increasing cost of doing business for the export-oriented industry eventually reduced the vital exports drastically besides increasing electricity and gas charges. The government, instead of withdrawing 2 percent sales tax on exports, increased sales tax on exports by 50 percent in the last budget 2015-16.
“The government was unable to refund sales tax claims, how can it pay back the claims after increasing it by 50 percent, questioned Pakistan Apparel Forum Chairman Jawed Bilwani. He said such policies are seriously impacting the value added textile export sector and not the spinning sector.
Quoting official figures of Pakistan Bureau of Statistics, he said the overall exports during July to October declined by 13.42 percent as compared to the corresponding year. During the same period, the overall exports of Bangladesh increased by 4.95 percent and Vietnam 9.20 percent, whereas the overall exports of China and Sri Lanka decreased negligibly by 2.50 percent and 4.50 percent respectively, he added.
He said, “These figures once again clearly prove that the government is consulting only with those whose agenda is to decrease exports on account of their personal gains. In the last fiscal year 2014-15, overall exports also declined by around 5 percent.”
The government, he said, should understand that until and unless the major causes are not addressed and if value added textile sector is not supported and their grievances in terms of cost of doing business/manufacturing are not evaluated in comparison with regional competing countries, our exports would never increase.
“We have time and again proposed the government to hire foreign consultants for assessing the difference in the cost of manufacturing in Pakistan vis-a-vis Bangladesh, India, Sri Lanka, Cambodia, Vietnam and China. This would actually give a true and clear picture of why our exports have nose-dived,” he added.
He asked the prime minister and finance minister to invite value added textile sector for threadbare deliberations to ascertain the causes of this depressing situation, adding that it is imperative that cost of all essential utilities be brought down at the level of our neighbouring and other competing countries, while priority should be given to the export oriented industries in the supply of all utilities without interruption.
