PRGMEA hails zero-rating restoration

Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) chief co-ordinator Ijaz Khokhar has hailed the government's decision for the restoration of sales tax regime for five major export oriented sectors in the federal budget 2016-17.
"We welcome the Prime Minister's initiative of zero-rated sales tax regime to facilitate export-oriented industry. The Prime Minister has won the hearts of business community by accepting their longstanding demand," he added.
He said that the step would go a long way and help promote the country's exports which are stagnant since long. The notification is an ample of government's seriousness to put economy back on rails, which would boost the trust of not only local businessmen but would also give a very good message to the foreign investors.
Ijaz said that zero-rated sales tax regime for value-added textile sector would certainly bring down the industrial cost of doing business and Pakistani products would be able to win their due share in the international market. He said that this initiative of the government would encourage business doing people to supplement the government endeavours aimed at economic revival of the country.
He hoped that zero-rated sales tax regime for export-oriented industry would give a jumpstart to the national exports, would give expansion to the industrial sector and would generate employment opportunities for the natives.
PRGMEA chief co-ordinator said the reintroduction of zero rating or no-tax and no-refund regime for the apparel sector, which is the major export oriented sector and contributes more than 50 percent of foreign exchange earnings, is a positive step toward the restoration of viability of the ailing garment industry.
"The PRGMEA was demanding zero-rating regime and met the PM in this regard and convinced him that the viability of the industry is must for the economic growth of the country."
He further appreciated reduction in export refinance rate by 0.5 percent. He said the government should also announce a comprehensive package for the industry as its exports are under pressure both in quantity and value terms.
"The high cost of doing business and an unrealistic value of the local currency has also played a role in this regard. The apparel sector was not able to utilise resources, as the liquidity shortage has become a major hurdle to produce exportable surplus."
He urged the government to liquidate pending sales tax refunds by the end of July as promised by the finance minister.