Rs 40 billion textile package approved

Prime Minister Shaukat Aziz on Wednesday approved, in principle, a Rs 40 billion textile package at a meeting, which was not 'officially' covered by media. Sources told Business Recorder that the meeting was attended by Minister for Textile Industry Mushtaq Ali Cheema, Minister for Industries Jahangir Khan Tareen, and officials of Finance Ministry and CBR.
Textile Ministry had finalised textile package in consultation with the stakeholders who were crying for last several months for relief, sources added. The main issues, as stated by All Pakistan Textile Mills Association (Aptma) in its letter to President Pervez Musharraf were zero-rating export activity and presumptive tax regime, multiple taxes on activity, zero-rating of taxes on raw materials, interest rates on short and long term borrowings and cross subsidies on energy.
Sources said that the Prime Minister discussed the proposed package of Aptma along with its impact on exports, economic growth and revenue collection before giving approval. They said that he agreed on most of the demands of textile sector with the observation that they should also do something rather than relying only on incentives. The package would be implemented from next fiscal year but it was not clear when it would be formally announced, according to sources.
When the Prime Minister House media camp was approached, one official said that he was not aware of any such meeting, and added that they were not asked to cover it. "This would be an informal meeting, as we were not asked for its coverage," said the official.
Sources said that the percentage of presumptive tax would be reduced as the textile sector had been protesting against its gradual increase with the passage of time. According to presumptive tax regime, CBR deducts income tax as percentage of sales without keeping in view that the entity is in profit or loss, which, according to Aptma was unjustified.
This correspondent also made several phone calls to Minister for Textile Industry, Mushtaq Cheema, for comments but, apparently, he was not ready to come on line. Similarly, a message was dropped at the office of Additional Secretary Incharge, Zafar Mahmood, but he did not return the call.