All Pakistan Textile Mills Association (Aptma) has urged the caretaker government to withdraw custom duty and additional custom duty on the import of cotton.
Zahid Mazhar Senior Vice Chairman Aptma commenting on the issuance of S.R.O. 847(I)/2018 dated 4th July 2018 rescinding the exemption of custom duty, additional custom duty and sales tax @ 3 percent, 1 percent and 5 percent, respectively and re-imposing of custom duty and additional custom duty @ 3 percent and 2 percent on import of cotton with effect from July 15, 2018, said that this is the last nail in the coffin of the ailing textile industry.
He said as per final statistics of cotton arrival released by Pakistan Cotton Ginners Association raw cotton crop has been below the target during the last three years. As on 1st May 2018, only 11.58 million bales of 155 kgs of cotton were produced in the year 2017-18 compared to some 10.73 million bales and 9.79 million bales of 155 kgs of cotton were produced in 2016-17 and 2015-16, respectively.
"This contradicts the claim of Cotton Commissioner that Pakistan produces 13 million bales of cotton annually on the basis of which government has re-imposed custom duty and additional custom duty on the import of cotton. This is just an illusion and nothing else," he maintained.
He said that firstly the area under cotton cultivation has witnessed a decline over the last few years since a high percentage of cotton growers have shifted to sugar cane. Secondly, the crop of cotton has declined due to the lowest yield of cotton farming achieved specially in Punjab which needs to be addressed on urgent basis.
Moreover, as per Pakistan Central Cotton Committee's Report this year about 48 percent of the area wherein cotton to be cultivated in Sindh was missed due to scarcity and poor management of water, he added.
He further said that due to imposition of Custom Duty and Sales Tax on import of raw cotton, import of finished cotton yarn has witnessed 500 percent increase in 2016-17 as compared to 2011-12. So this policy instead of supporting manufacturing of cotton yarns in Pakistan is rather helping the yarn manufacturing industry of other countries competing with us, Mazhar added.
He said that due to the high cost of doing business and inadequate supply of raw cotton almost 140 textile mills have already closed their operations resulting in a loss of one million jobs. Further around 75 to 80 mills are on the verge of closure which will add another 0.5 million to the unemployment figure.
He pointed out that due to the closure of about 140 mills and the mills operating under capacity, Pakistan's textile exports is suffering a loss of more than 4 billion US$ per annum which could have been a vital contribution in addressing the problem of the high trade deficit.
Mazhar said that the cotton crop of the country is far behind the consumption requirement of 15 million bales, for the third consecutive year, as a result, the industry is compelled to import cotton from other countries to meet its annual consumption requirement.
He demanded Prime Minster Nasir-ul-Mulk to save the export oriented textile industry and the economy of Pakistan from complete disaster by immediately withdrawing the imposition of Custom and additional custom duty on import of cotton. He has also demanded the government to make serious efforts in increasing the size of the annual cotton crop to 20 million bales following the example of India. This on the one hand will boost the income of the farmers and on the other hand reduce the input costs of all the segments of the textile economy which will facilitate high growth of exports.