Major working capital of textile exporters has been stuck-up in local taxes drawback and custom rebate refund regimes which is jeopardising the country's exports and adversely hitting the national economy, said Asghar Ali, Chairman and Muhammad Asif, Vice Chairman Pakistan Textile Exporters Association (PTEA) in a statement here on Monday.
Expressing grave concern, they said that huge amounts of textile exporters had been stuck-up in refund regimes as the government was not releasing funds for payment of exporter's claims creating difficulties in business flow and hampering the export growth and turn over. Elaborating they said, the local taxes drawback scheme was initiated to boost national exports and the results were visible in export sector performance.
Exports for the year 2009-10 rose to dollars 19 billion plus from dollars 17 billion in preceding year and to dollars 24.8 billion in fiscal ending 30th June 2011, which clearly substantiates the argument that if the exporters are facilitated they would produce good results.
However, unfortunately, the obvious lesson has not been driven home and necessary funds were not provided for drawback claims. Similarly funds for custom duty drawback are also not being released by the government and a large number of rebate claims are pending, they said. Held up amounts of exporters funds under the above two heads have created financial crunch for the exporters.
In the face of fierce competition in the international market from rival countries, Pakistani textiles were struggling to maintain their position. Textile export sector is a major forex earning sector to the tune of 13 billion dollar plus per year and textile exports of the country are crumbling and the industry and business were squeezing due to non-availability of funds, they claimed.
The export sector being life line of national economy is a very sensitive sector. Any disruption in the tempo or bottleneck in export facilitation would not only hurt the exports of the country but also has devastating impact on the industry causing productivity loss, job losses and industrial unrest, they said. Asghar Ali was of the view that severe shortage of energy had already devastating the manufacturing and industrial sectors rendering export units dysfunctional and that situation was resulting in the loss of production and that trend if not checked immediately would be dangerous for national economy.
Emphasising the importance of conducive industrial promotion and productivity augmentation conditions in the country, he said, to keep the industrial wheel running and providing maximum job employment to working hands in the country, it was imperative to facilitate the optimum industrial activity.
PTEA office bearers demanded the government to bail out textile industry and exports from current crisis by removing hurdles and provision of necessary incentives to increase the textile exports of the country. They demanded early release of blocked funds in refund regimes to enable the textile exporters to retain their hard won export markets at this time of tough competition in international markets.