Pakistan Apparel Forum (PAF) has demanded of the government to give sales tax exemption on the packing material of textile sector, sources told Business Recorder here on Thursday. The apparel sector has to pay 15-16 percent sales tax on the packing products.
"Our cost of doing business has increased by 12 percent as compared to the other countries of the region with the result the profit margin is decreasing gradually," sources said. "It is right that the sales tax we pay over apparel products packing is refundable but sometimes, we have to wait for 6-8 months for refund," sources said.
They said foreign investors are hesitant to invest even a single penny in the country due to political instability and deteriorating law and order situation. If the government gives sales tax exemption to apparel sector, it will then get the vigour to compete, sources added.