Pakistan Textile Exporters Association (PTEA) has demanded the government to allow zero rating sales tax facility on export oriented-textile chain in the coming budget 2015-16 as it will help to restore the competitive edge for Pakistani textiles in international market and will also up lift the exports and strengthen the national economy.
Talking to newsmen here on Monday, Sohail Pasha, Chairman and Rizwan Riaz Saigal, Vice Chairman PTEA said that PTEA has already forwarded a comprehensive proposal of zero rating of sales tax to FBR for implementation in next fiscal year. Zero-rating withdrawal has adversely affected exports at a time when a huge amount of sales tax refunds are already stuck up with the Federal Board of Revenue (FBR) and exporters are facing liquidity crunch. Terming withdrawal of zero rating regime and imposition of sales tax on supplies a detrimental to the business activities as erosion of textile industry's competitiveness, particularly against the huge incentives being provided by the competing countries like China, India and Bangladesh to their industry and exporters. They said that 80 percent of textile produce is exported in one or the other form, with only 20 percent left for local consumption. Therefore, zero rating of the entire value chain for the export is imperative to remain competitive in the international market. Textile exports should be actual zero rated and assisted to become competitive internationally as being done by our regional rival countries, they demanded. Sohail Pasha said that due to energy shortfall, major chunk of finance is diverted to develop energy infrastructure that has squeezed financial streams breading cash flow jerks.
To remain afloat, PTEA office-bearers urged to bring the textile exports out of inflationary pressure as well as to cut the production cost. They said that due importance has not been accorded to textile export sector which is earning 60 percent of the total foreign exchange of the national economy. They urged the government to allow zero rating sales tax regime for whole textile export chain in coming budget.
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