The Federal Board of Revenue (FBR) is seriously reviewing a proposal of Pakistan Carpet Manufacturers and Exporters Association (PCMEA) to refund fines and penalties collected from carpet exporters during 2008-2010, as these businesses were closed due to devastating floods.
Sources told Business Recorder here on Monday that FBR has issued instructions to all Model Customs Collectorates to submit details of penalties/fines refunded to the carpet exporters during last three years to ascertain actual amount of penalties/fines imposed on the carpet exporters.
In a presentation to the President Secretariat, the PCMEA observed that carpet manufacturing units are scattered all over Pakistan, especially in rural areas. The unprecedented floods and rains have totally destroyed the manufacturing base of the carpet industry.
In this regard, the industry submitted some facts and figures to highlight the level of carpet exporters' losses. Most of the looms were located in houses, and about 70 percent of the weavers were women. The manufacturing system is totally financed by SME exporters from their own resources and no long-term financing scheme had ever been introduced by the government. The exporters provide looms, designs, woollen yarn, and related raw materials along with advance labour charges to the weavers.
The recent rains and floods totally ruined not only the weavers, but also the SME exporters. The carpet industry has been in crisis for the last three years following travel advice to foreigners for not travelling to Pakistan, global recession, security reasons and load shedding.
The recent floods put thousands of workers jobless depriving thousands of families from their livelihood. The jobs lost due to security reasons and global recession were in addition to the said figures. The exporters are the most affected sector who lost all their assets earned through generations. For the rehabilitation and revival of the carpet manufacturing in rural areas, an interest-free soft loan scheme shall be immediately started. A comprehensive proposal in this regard can be presented by the concerned industry, when required.
The association further proposed that all penalties, fines paid by the carpet exporters during the last three years (from June 30 2008-2010) should be refunded. The mark-up on total loans availed by carpet exporters, either from State Bank or from commercial banks, should be waived for five years. The State Bank of Pakistan should freeze the matching requirements at zero times under the Part-I and Part-II of the Export Finance Scheme for five years and no penalties should be imposed during this period, the PCMEA added.
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