The Towel Manufacturers Association (TMA) has accused the Central Board of Revenue (CBR) of meeting revenue targets by reducing duty drawback admissible on the exports.
TMA founder Chairman S.M.A. Rizvi, in a statement, quoted the CBR sources as saying that the cut helped the government save three billion rupees.
He said if the remaining duty drawback was also withdrawn, the CBR would have a total savings of six billion rupees, which would meet 15 to 20 percent of the targeted budget of 2004-05.
He said that when the new CBR Chairman took, it was expected that some incentives would be given to the value-added textile sector, but, unfortunately, it has been given to the favourite sector of yarn, leaving the value-added sector on lurch.
Rizvi pointed out the legacy of the previous sales tax system, which the new CBR Chairman and member, CBR Sales Tax, inherited, were complicated laws, plethora of the SROs, corrupt subordinate sales tax officers and the audit staff.
The sales tax laws were so complicated that some unscrupulous investors, allegedly in connivance with the subordinate sales tax and customs staff, could make paper exports of billions of rupees and the government would take pride that the exports had increased, he said.
Now, the new Chairman and the member, Sales Tax, were in a quandary how to simplify the sales tax laws and give relief to the exporters, he added.
Rizvi thought that there was a section in bureaucracy, which was more interested in domestic revenue than the exports. Hence, the exports were scarified at the altar of revenue.
He expressed surprise over the fact that the Export Development Fund (EDF), collected from the exporters for research and development, was under the control of the Ministry of Finance instead of the Ministry of Commerce.
That money, he said, was a trust of the exporters and should have been spent on them by the latter.