The five zero-rated sectors including textile, leather, carpets, surgical and sports' goods warned on Thursday that they would go on strike, if the government withdraw zero-rating facility by imposing Reformed General Sales Tax (RGST).
This was announced at a joint press conference of five zero-rated sectors, including value-added textile associations and premier chambers of the country against the imposition of RGST. Representatives of all the sectors lamented the government decision to implement RGST unilaterally without consulting the major sectors of the economy.
Government has already documented these sectors in 2005 and all the stakeholders had met several times with the then chairman Federal Board of Revenue (FBR) and former Finance Minister who agreed on continuing zero rating facility to these sectors, they added.
The press conference was addressed by the Chairman Pakistan Readymade Garments Association Ijaz A. Khokhar, Waqar Amin, Chairman of the Surgical Instruments Manufacturers Association of Pakistan, Khwaja M. Usman, Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association, Juniad Makra Vice President Karachi Chamber of Commerce and Rana Mushtaq, chairman All Pakistan Value-added Textile Sector.
"The withdrawal of sales tax zero rating facility to these five sector under the RGST regime will totally shut down the industry of the country which earns 76 percent of the foreign exchange through exports", said M. Javed Balwani, Co-ordinator Value-added Textile Forum Association.
Industry has already been crippled owing to frequent load shedding, high electricity and gas tariff, multiple duties and taxes, resultantly high cost of doing business, which compelled the industrialists to shift their business to Bangladesh, Egypt, Jordan and Dubai, they added.
They further said that these industries have the largest employment in the country and abolition of zero-rating facility would bring a new wave of unemployment. The representatives further said that the country's industry had a bad experience as Rs 50 billion is lying with the government in the shape of duty drawbacks and refunds of the textile sector.
"We strongly reject the withdrawal of zero-rating facility under the RGST regime," said Ijaz Khokhar, adding that garment industry is already at the edge of disaster due to increase in the utilities cost, shortage of natural gas and prevailing law and order situation. Ijaz said that negative travel advisories were restricting foreign businessmen to visit Pakistan, which is rapidly moving to India, Bangladesh and China. Therefore, it is not appropriate time to break the zero-rating regime meant for the textile chain.