Pakistan Apparel Forum on Wednesday asked the government to reverse its decision of placing Gas Infrastructure Development Cess to scale down the textiles' growing input cost, fearing the fresh levies would downsize the country's largest exporting sector.
Talking to Business Recorder, Chairman PAF, Muhammad Javed Bilwani said that the government's move to place the GIDC as Rs 100 per mmbtu would push manufacturing cost 'tremendously' and have a minimum impact on the sector by over 3.5 percent.
"The government must understand. Textile is high volume low profit business," he urged, saying that struggling sector's profitability was hovering between four percent and five percent and not more than this. He regretted that the Value Added Textile Sector export would continue falling against the boosting growth by the neighboring competing countries augmenting their global trade manifold for their low input costs and extraordinary incentives which their governments had offered to their respective industries.
The Value Added Textile Export sector is a backbone of the national economy with a great potential for earning foreign exchange, he said that the sector contributed 54 percent to the country's total global trade and sheltered 42 percent urban jobs but was still heading to an imminent 'disaster'.
He said that the government should revive a zero-rate status for Textile Sector with "no payments, no refunds regime" for the five export-oriented sectors through restoring the SRO 1125(I)/2011 to its original status. The government should release all pending Sales Tax Refund; Custom Rebates and DLTL Claims, he demanded, saying that a huge amount of exporters' liquidity was still withheld, which continued to restrain the exporters from running their manufacturing units. The downsizing manufacturing also scales back their production to ensure export deliveries, the Chairman PAF indicated.
He also wanted the government to undertake pragmatic policies in consultation with the textile stakeholders to reduce soaring cost of business by fixing tariffs of all essential raw material - inputs - gas, electricity, water etc. He urged the government to award a separate status for textile sector and supply it with all key utilities including gas, power and water. "Bangladesh is fetching $6 billion in Value Addition per Million Cotton Bales, while Pakistan just $1.17 billion. If the government considers above recommendations, we could convert our 14 million cotton bales @ $6 billion per million cotton bales like Bangladesh to $84 billion," he said.
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