Hamid Sultan Co-ordinator Micro Industries Development Centre has emphasised the need for Public Private Partnership (PPP) programmes for combating the rectification of grievances faced by Micro Industries like sewing machine and stressing on the higher value of PPP towards socio economic acceleration.
Talking to newsmen, he said that the first national policy on Public Private Partnership announced by Prime Minister emphasising it as important resourceful reform tool for generating growth and bridging the gap between the supply and demand infrastructure.
Fighting with the poverty is the time needed agenda of developing countries and we have to examine the state crafted policies executed, command regulatory reforms are not suited for broad participation by private sector and we need substantial straightening towards development of human capabilities through skills and institutional mechanism within the government for effective interaction, he added.
Hamid Sultan said that government is diverting high time to genuine needs for development of social index and we need to proceed for consistency in our development with national spirit. Constraints in our taxation sector increasing unemployment by eliminating protection biased in the favour of micro industry.
In budget 2006-2007, he mentioned that the Sales Tax on the import of domestic sewing machine was lifted vide SRO No 462 making it justified on their side that there is no sales tax on the import of industrial sewing machines and sales tax on domestic sewing machine is being lifted to balance the tax slab.
Hence while doing so it was not thought prudent that domestic sewing machine has no role in our textile industry towards value addition it is dowry item and used at homes for stitching, from decade of years this item is treated as capital goods item under customs nomenclature as its function is same like fan, washing machine, cycle.
It is more astonishing under the recommendation of Engineering Development Board when this case was submitted before the budget anomaly committee it was clarified by Federal Board of Revenue (FBR) that Sales Tax slab with import status of industrial sewing machine rationalised without checking the technical aspects and difference in domestic and industrial sewing machines, he added.
Hamid Sultan said that survey report conducted by Engineering Development Board clearly defines there is no industrial sewing machine or parts manufacturing unit in the country. There are 3000 assemblers having trade mark registration those are making domestic sewing machines over to the price of Rs 2,500 each machine instead of taking the sector using trade marks registration rights into sales tax net this sector has been liberalised for sales tax liability.
The sewing machine industry survey of EDB clearly embark upon these facts that this industry is monopolised by registered trade mark user sewing machine assemblers and this sector need to be taken under sales tax net which will help FBR to control under invoicing in the import of sewing machines and parts. assemblers of sewing machines are purchasing parts from micro manufacturing sector and financial structure of assemblers is strong whereas family based small units is very weak. Apart from it sewing machine assemblers purchase parts from importers those are concealing 80 percent import value and sigma of importers plus assemblers is like cartel, which has ceased the development of sewing machine industry in Pakistan from years over, he pointed out.
He mentioned that FBR can collect heavy amount of sales tax customs duty from assemblers of sewing machines having trade mark registration rights. Sewing machine having real value @ US $20-25 is imported @ 5 to 10 $. In spite of machine import there are cases of duty theft @ 80 percent, on sewing machine parts and all these constraints are technical matters and to enhance tax receipts from financially strong groups and providing protection to micro sewing machine industry a healthy environment will facilitate and up grade our industry to meet with the challenges of free market economy.
Engineering Developing Board, sectoral development section and DGM tariff diverting top priority to the sewing machine industry with these genuine facts to bring modernisation in the manufacturing of domestic sewing machine. Pakistan is producing 200 years old model of sewing machine, which is prone to environment conditional ties of World Trade Organisation (WTO) green manufacturing rules and we have to shift the body of sewing machine from pig iron to plastic body like fans, washing machines, air conditioner. It is the need of the time that FBR officials think minutely to sign a memorandum of understanding (MoU) under the recently announced National Public Private Partnership Policy Terms with economic development organisations like Micro Industries Development Resource Centre those are working in linkages with global institutions to provide economic opportunities to small sector of industry for poverty alleviation and to bring this industry at par with global prices and quality agenda poring no environmental problem under WTO reforms, he concluded.
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