Federal Minister for Textile Industry Abbas Khan Afridi on Thursday said that budget was being prepared in the line with business community's expectations and value-added textile sector would get good news. Addressing the members of Pakistan Hosiery Manufacturers and Exporters Association (PHMA) at PHMA house, he said that there would be a number of benefits, which are under consideration for value-added textile sector in the upcoming budget aimed at facilitating the sector and generate new employment opportunities in the country.
He said the government was aware that value-added textile sector was facing immense problems and hurdles, which needed to be removed for enhancing exports in the best interests of the nation. "The reason behind rising terrorism activities is unemployment. We can curb it by creating new job opportunities for the young generation," he added.
The value-added textile sector can play a vital role in creation of new employment opportunities therefore the government is making all-out efforts to remove the hurdles in the growth of this sector, besides providing all necessary facilities. To a question about sales tax issue, he said that Federal Board of Revenue was planning to increase sales tax rate up to 17 percent while the ministry of textile was making efforts for a zero-rated regime for the value-added textile sector.
"Ministry of textile is aggressively working on budget proposals, submitted by the industry, in co-ordination of FBR and ministry of finance for a positive budget for the textile sector," he added. Afridi said that the ministry would not accept any decision that may hurt the textile sector. He said the rising labour cost in Bangladesh and other countries had created new opportunities for Pakistan's textile sector. "Now there is need to focus on quality and explore new markets for value-added textile exports," he added.
"Ministry is also considering negotiating with the State Bank of Pakistan and other commercial banks a relief package for textile sector to reschedule their loans aimed at avoiding further default and closure of industry," he informed. Talking about the sales tax refund issue he said that ministry of textile was in touch with the ministry of finance for early release of pending refund amount.
Earlier, Javed Bilwani, chief co-ordinator PHMA, said that the value-added textile export sector was a vital sector with 42 percent of total exports of the country and contributing 80 percent of the total textile exports. He said that the sector had largest share in employment with almost 34 percent of nation's total employment including illiterate female workers. Exports are zero-rated globally just because exports are a main source of earning valuable foreign exchange for any nation, he added.
With this in view, in 2005 the "no payment no refund" system was introduced and continued for almost 9 and half years. However, the previous government end zero-rated regime in 2013 with consulting the stakeholders. "If government's aim is to generate revenue, a system is required to be devised whereby monitoring of the growth rate of business and industry be done to determine whether the margin of profit of such business or industry is comfortable and positive or miserable and negative," he added.
Bilwani said that at present some Rs 15 billions of DLTL claims are held by the government since last three years. He demanded that the long outstanding DLTL claims be cleared without any further delay. He also proposed, that all Refunds ie Customs Rebate; Sales Tax on Packing Material; SED be released to the exporters at the time of export proceed realisation. This would give a great boost and create efficiency of exporters, minimise the problems and create conducive environment, he added.
Government should grant a separate status and top priority to export-oriented industries in the supply of power and gas as well as water as they are the foreign exchange earners and generate the largest employment, he appealed. "Now when the government withdraws the exemption of 5 percent duty on import of cotton yarn, then the government should also impose 5 percent duty on export of cotton yarn to protect the value-added textile export sector," Bilwani demanded.
Former chairman Sindh Board of Investment (SBI) Zubair Motiwala said that there was a need of implementation of the Textile Policy in letter and spirit. "The drawback on taxes and levies have been stopped from 30th June, 2011 as a result of which, not only the envisioned export target of $25 billion is in jeopardy but owing to huge amount of held up Drawback Claims of billions of rupees our production and export commitments have come to a halt and we are back to square one," he said and proposed extension in textile policy for further 5 years. On the occasion, MNA Haji Muhammad Akram, member National Assembly's Standing Committee on Textile Industry, MNA Jamshaid Ahmed Dasti and others also spoke.
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