The government has gone back on its promise of zero rating for five export sectors, which will indeed prove most disastrous for the country's exports and economy, said Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum on Wednesday.
He strongly articulated that it was very serious that the exports have declined further by 12.92% to $15.606 billion in the first nine months of the current fiscal year (July-March 2015-16) from $17.921 billion during the same period last year While the exports of our regional competitors have increased. Isn't it a great irony and dilemma that exports have decreased by Rs 239 billion which clearly proves the amount of foreign exchange earnings lost by our nation. Further Rs 239 would have been in circulation and would have resulted in earnings in tax revenue. The export target is $35 billion for the current fiscal year and with negative growth in exports, we are still 26% behind the target.
The decision not to grant zero rating to the five export sectors would be tantamount to crippling and ruining our exports and would indeed be suicidal because it has taken a lot of pains and troubles for the five zero rated export sectors to struggle to export against tough competition from regional competing countries with heavy odds against them such as huge amount of their piled up liquidity outstanding with the government in Sales Tax Refund Claims, Customs Rebate Claims and DLTL Claims and to crown this all, rising cost of inputs.
Bilwani stressed that it is imperative that the government of Mian Muhammad Nawaz Sharif - a business friendly government - keeps the promise and commitment made by none other than the Prime Minister of Pakistan, Mian Muhammad Nawaz Sharif himself to grant the most practical zero rating facility in Sales Tax to the five vital export sectors only because Zero Rating Facility extended in 2005 greatly helped in boosting exports.
Bilwani was dismayed by the fact that despite tall claims of release of held up Sales Tax Refund Claims of exporters only some payments of claims below Rs 5 million against those RPOs issued till August, 2015 were paid and that too, payments were made to a favoured few. For exporters with claims over Rs 5 million, initially they were promised payments in the form bonds and later payments in cheque but it is surprising, he said, that as yet no payments have been made to them despite the fact that RPOs against the same have been issued for 19 months.
He most earnestly appealed to the Prime Minister of Pakistan that the zero rating - "No Payment No Refund" system for exports should be implemented forthwith as per his commitment made with the exporters because collecting Sales Tax and then refunding is not only an exercise in futility but involves precious time of FBR Staff and also burdens the foreign exchange earning exporters in unnecessary hurdles and indefinite blockade of their sorely needed liquidity causing extreme heartburn to them who have been instrumental in not only earning the largest amount of sorely needed foreign exchange for the country but also generating largest employment.
Bilwani rued the fact that despite several Expo Exhibitions being encouraged by the Government of Pakistan and tall claims of visits by large number of foreign buyers, unfortunately no increase in exports is witnessed. He appealed to the Business Friendly Government of Mian Muhammad Nawaz Sharif to be really pragmatic and seriously review such futile exercises of the Government aimed to boost exports and ensure result oriented measures such as providing forthwith zero rating facility to the five export sectors; immediate and speedy release of held up funds of the exporters with the Government; reduce of cost of inputs - gas, electricity, water tariff etc and bring at par with our regional competitors, all of which are most essential requirements of the exporters.-PR