Pakistan Tanners Association (PTA) Chairman Agha Saiddain has said that Pakistan Revenue Automation (Pvt.) Ltd (PRAL) has deprived the entire leather sector from payment of sales tax refunds released by the Federal Board of Revenue (FBR) as it intentionally or unintentionally failed to upload data of the sector on the system for the purpose.
PTA Chairman while talking to Business Recorder Thursday said that the Federal Board of Revenue had released an amount of Rs 8.741 billion on November 10, 2018 for payment of sales tax refunds to the five zero-rated sectors including textile, carpets, leather, sports goods and surgical instrument. Unfortunately Leather sector has totally been ignored in processing the sales tax refunds as PRAL did not upload the data of this vital sector, he added.
The refund was made against 4117 refund payment orders issued up to November 08, 2018. All the zero-rated sectors have received sales tax refund except the leather sector, he added. The reason for this discrimination is said to be due to a mistake on the part of PRAL who failed to upload information about leather sector in the system. The refunds were to be transmitted electronically to respective bank accounts of the claimants against RPOs already issued by FBR and subsequently by the State Bank of Pakistan.
The State Bank of Pakistan transmitted refunds to the account of claimants but payments could not be transmitted to leather sector due to mistake on the part of PRAL System, he said adding that the whole leather sector is under depression and PRAL have further added insult to the injury.
He requested the Ministry of Commerce to take up this issue with the FBR which has caused panic among the tanners and leather sector as well. FBR has always been the biggest hurdle in enhancing the country's exports. Moreover, all the export-related friendly policies introduced by the government failed to yield desired results mainly due to the rigid and unfriendly behaviour of the FBR authorities, he maintained.
Pakistan's exports have been declined from US $25.110 billion of 2013-14 to US $20 billion. The diminishing exports resulted in loss of foreign exchange to the tune of US $12.582 billion in last five years, he said.
The previous government was always reluctant in payment of refunds to the exporters which created liquidity crunch in export sector and ultimately exports were dropped. The country is facing severe issues of balance of payment and current account deficit mainly because of imprudent policies of the previous regime, he said.
PTA chairman said though the present government is very clear on this subject and Ministry of Commerce is busy in formulating export friendly policies, yet FBR and commerce ministry are not on the same page otherwise the entire leather sector would have not been ignored in payment of sales tax refunds.
He said the authorities concerned should learn from Bangladesh, Vietnam, Cambodia, Indonesia, and India where exports of last five years almost doubled. It is shame for us that country with a population of over 200 million is having exports of US$23.228 as against exports worth US $506 billion of Singapore with Population of 5.7 million, US $353 of Hong Kong with Population 7.30 million, US $509 billion of South Korea with population of 50 million, he maintained.
He lodged a strong protest to the FBR authorities for ignoring the leather sector and urged the prime minister and commerce ministry to take serious note of the negligence of PRAL He said the country is now left with foreign reserves of US $13.832 billion and the government has no other option except to focus on increasing exports, he said.