Prime Minister Advisor on Commerce, Industries and Production and Investment, Abdul Razak Dawood has said that the government will provide all possible incentives to the exporters and industry at this critical time.
Talking to Business Recorder, he said, when the coronavirus started in and outside Pakistan, exporters began contacting him by telephone to update him on the impact of this epidemic on their shipments and other issues. Exporters informed him that international chains like GAP, Zara and Lewis are asking them to hold shipments, which implies that if shipments are on hold , exporters will face liquidity crunch.
"I spoke to the exporters through conference call as we are inviting them in person to hear their concerns. They presented a list for relief due the prevailing situation. Whatever points were related to State Bank of Pakistan(SBP) I gave to the Governor SBP and requested immediate steps because factories production has started to come down as this epidemic will end in one, two or three months but this situation would create liquidity crunch for them," he added.
Dawood further revealed working capital rules. The Export Refinance Scheme (ERF) he explained by saying if an exporter sends goods worth $ 1000, he can get working capital of $ 500. The SBP has increased the limit of working capital by 33 per cent for the current financial year. However, exporters have sought 100 per cent for the next fiscal year.
According to the rules, exporters' remittances should come within 180 days, but SBP has extended this period to 270 days. Exporters have also urged Finance Advisor to release their sales tax refunds as early as possible. Dr Hafeez Shaikh has expressed his willingness to release Rs 10 billion immediately.
Exporters also asked Commerce Ministry to release their pending DLTL immediately, he said, adding that approval has been granted and release of Rs 9.3 billion has begun. However, the remaining balance of Rs 10.5 billion will be released in the first week of April 2020.
"As the remaining Rs 10.5 billion is released to exporters, their entire amount of Rs 35.5 billion will be cleared," he said, adding that the refunds of Technology Upgrdation Fund (TUF) will be paid in next fiscal year as there was no budget provision for this scheme.
Exporters have also demanded that turnover tax should be lowered to 0.5 per cent from 1.5 per cent, he said, adding that the government is looking into it. Meanwhile, Power Division in a statement has said that due to Corona situation, the federal government is working on a relief package in the power sector for businesses and the people of the entire country. On Monday (tomorrow) a high level meeting is to be chaired by the Prime Minister in this regard.
Spokesmen of Power Division said that a lot of work is already going on in the Power Division in this regard, therefore it is advisable that provinces do not announce any relief unilaterally for power sector as all of Pakistan is in this together.