Pakistan Footwear Manufacturers Association (PFMA) Chairman Khawaja Muhammad Ali has strongly regretted the CBR notification on reduction of duty drawback rates and demanded its reversal.
According to an association's spokesman here on Wednesday, the chairman said that the CBR should have consulted the association before drastically reducing the rates ranging from 50 percent to 77 percent. He was of the view that the CBR should have considered the following facts before issuing SRO 838(me)/2006. He added that purchase orders with foreign buyers are concluded about six months in advance by taking into account the then prevailing rates of government taxes/rebates. This notification has been made effective with immediate effect, ie, August 17. Thus this has inflicted heavy losses to the exporters on already concluded orders, he added.
He averred that the association has prepared work sheets according to IOCO calculation basis of duty drawback rates. These sheets clearly indicate that the rates should be enhanced but the CBR has not given them any chance to present their case.
He said that CBR should also consider that they are competing in the international market with countries like China, India and Bangladesh. These countries provide a lot of incentives to their industries than Pakistan in addition to higher duty drawback rates like 13-percent in China, hence the Pakistani footwear manufacturers would be at great disadvantage, which would certainly affect their exports, he added. The chairman pointed out that they have achieved appreciable growth rate in footwear exports in the near past but the reduction in duty drawback rates would seriously affect their growth rate and must be reversed.