Setting up dyeing, processing units: Sialkot garment industry demands five-year tax holiday

The Sialkot-based manufacturers-cum-exporters have demanded tax holiday for five years to establish dyeing, weaving and processing units to increase value-added exports to $500 million from $250 million annually. They said on Monday that the government should include their proposals in the coming budget and the trade policy regarding development of garments industry in Sialkot.
The value-added garment industry is the fourth largest exporting sector with $250 million shares out of $900 million total exports made from the city annually, they claimed.
"Garments sector annual exports amount to one-third of exports made from Sialkot. We demand of the government to provide the investors with five years' tax relief to set up dyeing, weaving and processing units in the city to scale down additional expenses of transportation and labour," said Ijaz Khokhar, a former chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea).
He demanded of the government to set up vocational institutions for men and women in the city to overcome the dearth of manpower, which is presently at threatening low level. Sialkot is the only city in Asia that alone competes with China in the world market with its martial arts kits, he added. "Some 20 percent martial arts kits of total world demand is produced at Sialkot. Pakistan has direct competition with China, while the manufacturing city is faced with shortage of labour and basic infrastructure," he said.
Japan, he said, has almost diverted to China for meeting its martial art kits demand. Pakistan can earn more for national exchequer by offering incentives like tax concessions to its local investors, he added.
He said that local investors demand a similar tax holiday as the government has provided to investors for establishing industrial units in Gwadar. He added that the ministry of textile can play a vital role and it should evolve policies for the development of industries.
The increasing dependency of Sialkot textile garment industry on other cities for dyeing, weaving and processing their products not only increases cost of production but also brings about delays in exports, he said.
He pointed out that several exporters had lost their deals with foreign buyers for not meeting their export deadlines. About research and development (R&D) assistance, he said that it has played an important role in boosting exports of garments, and demanded of the government to continue it.
"Particularly, R&D assistance helps the exporters bear huge travelling expenses," he said, adding that under the R&D facility, manufacturers have inducted new machinery and carried out successful marketing in the world markets.