FAISALABAD: Federal budget 2023-24 is a ‘balanced budget’, nevertheless, there is enough room for improvement therein. This was contended by Muhammad Pervez Lala, Chairman All Pakistan Textile Processing Mills Association (APTPMA) here.
He maintained that despite a heavy burden of foreign and domestic loans and high inflation, coupled with the difficult economic situation, such a balanced budget has been presented.
He observed that a number of positive corrective measures have been envisaged in the budget, like increase of business turnover limit of a manufacturers from Rs.250 million to Rs.800 million, exemption of Customs duties on raw materials/ inputs for machine tools, reduction of minimum tax liability of turnover from 1.25% to 1.0% for companies listed on Pakistan Stock Exchange, more clarity in carry forward regime of minimum tax on turnover, zero rating to exporter registered under Export Facilitation Scheme, special relief package for salaried persons, pensioners, etc.
He said; however, still a lot has to be done, adding that there no details of reduction of customs duty on import of dyes & chemicals used in the textile processing industry were found in the Finance Bill.
Further he said that O.5% increase in withholding tax rate for commercial importer on import of goods falling in Part III of Twelfth Schedule to the Income Tax Ordinance, 2001, will enhance cost of our raw materials. Rate of minimum tax liability on turnover should also be reduced from 1.25% to 1.0% for our textile processing industry and PVT companies as of Limited companies listed in Pakistan Stock Exchange.
He said our government is to understand that only way to progress is to earn more dollars and for earning more dollars, we need to exports more and govt should concentrate on low hanging fruits, like IT and textiles.
IT was considered in the budget but textile sector and 5 export oriented zero rated sectors were completely ignored despite of our so many appeals that this industry is not able to perform due to high cost of doing business and manufacturing, he said.
It is evident that in period where we have two billion dollars less exports in textiles, Bangladesh achieved 5 billion dollars more exports to the world. He said that exports went down due to recession in the world, US imported 13% less, and EU imported 10% less.
He regretted that Regionally Competitive Energy Tariff (RCET) for gas and electricity, Gas tariff was abruptly withdrawn and so much so SROs issued on 16th of February and implementation from 1st January, i.e., retrospective effect which is unconstitutional. RCET of electricity was suddenly withdrawn despite of promise that RCET (Gas and Electricity) will end of 30th June 2023 and cost to the export oriented sectors multiplied by 100% in term of electricity and 35% in term of gas.
He said it is very problematic as these are the basic raw materials for this industry and then interest rate went up from 7/8 % to 23/24%, refinance from 6% to 18%, DLTL frozen, fast scheme of sales tax not working as designed to, adding all these matters lead to very high cost of manufacturing.
Copyright Business Recorder, 2023