The Pakistan Readymade Garments Manufacturers and Exporters Association has welcomed the continuation of greater trade access of Pakistani products to European markets, as the European Union has decided to retain Generalized System of Preferences (GSP) Plus status to Pakistan.
PRGMEA senior vice chairman Sheikh Luqman Amin stressed the need for preparing an aggressive marketing plan, besides implementing the PM Export package in its true spirit to attain maximum benefits of the second phase of GSP Plus status. He said Pakistan has almost failed to fully exploit the earlier facility of GSP plus granted in 2014 mainly due to indifferent attitude of the government departments towards the country's top export oriented value-added textile sector.
Sheikh Luqman said that despite the European Union's granting of GSP Plus status to Pakistan, the economy could not able to exploit it due to various reasons and sales tax refunds issue is the top of the list. At present the State Bank of Pakistan, especially its regional branches in Punjab, have become a major obstacle in disbursement of Duty Draw Back of Taxes (DDT) and Drawback of Local Taxes and Levies (DLTL) claims. The central bank, instead of facilitating the exporters, has constantly been raising objections.
He said that ex-PM Nawaz Sharif had announced export package with a payment arrangement of Rs 10 billion per month for 18 months, starting from January 2017 and ending up on June 2018. He said that presently, almost 50 percent exporters have not received refunds under the previous package of former PM as the central bank's regional branches, which deal with more than 70 percent of value-added textile exporters based in Punjab, are not ready to process their cases speedily. He added that textile sector has been facing several issues for the last few years, which resulted in low textile exports, despite the GSP plus status from the European Union. PRGMEA leader said the business community is keen to enhance the country's exports by $1 billion annually but various issues, such as unreleased refunds, power and gas shortages faced by export-oriented industry, if not resolved, will hamper growth in exports.
Non-release of refunds has created severe liquidity problems and consequently exporters are forced to arrange working capital from the expensive sources which ultimately hurt their competitiveness in international market and ability to make timely exports.
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