KARACHI: Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has set forth scores of propositions for the fiscal budget 2024-25, topping with the law and order issues as obstacles to the investments.
In a set of proposals to Jam Kamal Khan, the Federal Minister for Commerce and Textile Industry, the PHMA underscored the need of a better order, new economic zones, government’s push for austerity, incentives for exports, more reliance on the local natural resources, ending taxation mires, etc.
Muhammad Jawed Bilwani, Patron In-Chief of PHMA initiated the proposals, seeking a better law and order situation for the foreign direct and local investments to help underpin the country’s ailing economy.
A bad law order situation, according to the proposals, has caused the local and foreign investments to take off the country with a relocation of manufacturing units to other countries. The government needs to step up protection to the industrial areas in Karachi, Lahore, Faisalabad, Multan and Sialkot.
The government should consider treating exports exclusively on the federal levels with providing all facilitations under one window. Exports and industry is the federal subject under the trade policy.
This will also address the challenges faced by the industries and exporters in the hands of the provincial governments. A help-desk should also be set up primarily for export at the Prime Minister House with a dedicated focal person to facilitate exporters.
A country specific new economic zone for FDI should be established for instance China Economic Zone, which should be equipped with all basic amenities, residence and other facilities under one-window.
The PHMA proposed that the government’s important ministries particularly commerce, finance, industries, planning, I.T.; etc., should set up their research cells. These cells should be run by a respective permanent staff.
The government should embrace on austerity with inefficient staff layoffs, restrictions on spending, curtailment of electricity bills, and making of the lavish ministerial offices simple. Performances of the staff should be evaluated on a regular basis.
Automation should be rolled out to minimise the human interventions, in the FBR especially for the audits. The proposals indicated that the men’s involvement in the audit stages causes harassment at times.
They said gas, a natural utility for the efficient sectors, can be utilised for the utmost productively with higher than 50 percent CPP plants.
Presently, gas is supplied to the Independent Power Products (IPPs) which have inefficient plants, depriving the industries of adequate supplies. The SMEs should be provided with gas at a cost-to-cost tariff for competitiveness.
PHMA urged the government to suspend Export Development Surcharge of 0.25 percent, which is deducted from the export proceeds of exporters. The billions of rupees EDF stands unspent, which should be provided to the exporters to find some financial relief.
A very high export financing and discount policy rates should be revised downward to a single digit. The complex taxation system with multiplicity of taxes should be rationalized and simplified. Besides, the SRO culture should end.
The five export sectors are faced with a discontinuation of Regionally Competitive Energy Tariffs (RCET), leaving the entire industrial chain uncompetitive amid higher manufacturing costs. The government should earmark funds in the budget to help the industries cancel out the impacts of higher production costs.
The duty drawback on local taxes and levies under the new Textile and Apparel Policy 2020-2025 should be restored to encourage exports. The government may consider allocating funds in the budget to release the pending claims of DLTL and TUF scheme which are held with the SBP.
Trade and Investment Officers (TIOs), who are posted abroad, should be designated only from TDAP or the ministry only, hoping these officials will perform more efficiently with insight on trade policy matters.
The National Compliance Centre under the Ministry of Commerce should start its operations immediately to handle and regulate the affairs of industrial and export compliance for sustainable exports.
One out of the several proposals sought that the government should revive SRO 1125 and reintroduce system of “no payment and no refund of sales tax” for the five export oriented sectors or reduce the sakes tax rate.
It added that the government may also consider a reduction in sales tax rate from current 18 percent to 5 percent to help the exports ensure availability of the adequate liquidity. The exporters are grappled with financial problems, despite the FASTER system is streamlined.
Similarly, the PHMA proposed a reduction in the withholding tax for exporters from 1 percent to 0.5 percent, seeking a cut in duties for the import of raw material particularly cotton yarn.
Copyright Business Recorder, 2024
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