Ministry of Commerce and Textile sought recommendations from five major export sectors to reduce the cost of doing business and make them competitive in the international market. Prime Minister Shahid Khaqan Abbasi on Friday assigned the task to federal minister for Commerce and Textile Pervaiz Malik to come up with a long-term plan in 30 days in consultation with exporters targeted to reduce the cost of doing business, encourage investors and make export sectors competitive in the international market.
Talking to Business Recorder, Textile Division Spokesperson Kanwar Usman said that letters have been written to textile associations seeking their recommendations covering: (i) cost of doing business; (ii) skilled development; (iii) investment; (iv) quality; and (v) compliance. The associations have been requested to submit their inputs by October 20 as the final report would be submitted to the Prime Minister in 30 days, Usman added.
About the revised package for exporters, Usman said that Economic Coordination Committee (ECC) of the Cabinet approved the revised package in its last meeting. However, the government has yet to notify the revised package for exporters.
The revised package allows a 50 percent of the export incentive package for eligible textile and non-textile sectors on the same terms as for the period from January 1 to June 30, 2017 without the condition of increment with the objective to boost exports. The remaining 50 percent of the rate of incentives may be provided if an exporter achieves an increase of 10 percent or more in exports as compared to corresponding period of last year.
Further to improve exporters cash flow, the disbursement against recommendation may be made on the export performance between July-December 2017 subject to submission of a bank guarantee that the exporter will return the excess amount, in case his/ her annual exports are less than the amount of drawback paid to him/her while an additional 2% incentive may be provided for exports to non-traditional markets - Africa, Latin America, non-EU European countries, Commonwealth of Independent States and Oceania.
To further simplify the payment process the Ministry of Commerce and Textile held a meeting with State Bank of Pakistan, Federal Board of Revenue on October 11, 2017 while another meeting is scheduled for Monday in this regard.
The spokesperson said that the government has released Rs 14 billion to the textile sector under the Prime Minister' Incentives package against the claims of Rs 18 billion by the first week of October. The amount was disbursed for duty drawbacks on local taxes collected from garments, home textiles, processed fabric, greige fabric and yarn manufacturing cum-exporters units under the package. Drawback available to garments is at 7 percent, made-ups at 6 percent and processed fabrics at 5 percent. For the very first time it has been extended to yarn and greige fabric at 4 percent.