Fawad Ijaz Khan, Patron-in-Chief Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) and Mohammad Danish Khan Chairman PLGMEA criticised the decision of caretaker government to introduce mini-budget just one month before the announcement of annual budget. Fawad stated that exporters are already burdened with increasing costs of inputs and severe electricity crisis. They are finding it hard to meet their export commitments.
The adverse law & order situation in Karachi is also affecting the export business severely. Imposing new taxes or increasing tax rates for exporters will cripple their businesses and force widespread closures leading to unemployment. Fawad stated that increasing withholding tax on exports to 1.5%, increasing GST rate to 17%, imposing 1% withholding tax on duty free imports and 0.3% withholding tax on cash withdrawals will cause sharp increase in the costs of inputs. Even 1% tax on exports is also very high which will be more than the tax by normal companies if a comparison is made on net income basis.
Danish Khan stated that the exports of leather garments are already showing declining trend from April 2013 due to above mentioned causes and is most likely to continue this decreasing trend in the next couple of months. The exports declined by over 15% during April 2013 as compared to March 2013. Fawad Ijaz Khan urged the caretaker government to withdraw its decision to introduce mini-budget or to burden the already over-burdened exporters with additional taxes.-PR