KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) have expressed serious concerns over the reports of possible withdrawal of Zero Rated Facility for the five key exports sectors in the forth coming budget.[the_ad id=”31605″]In a joint statement, business leaders said withdrawal of sales tax zero rating for key five sectors i.e. value added textile, leather, carpet, surgical instruments and sports goods would adversely impact country’s exports, which already were facing many challenges.
These five sectors contribute 70 percent in exports of Pakistan and contribute significantly in earning foreign exchange and providing employment to skilled and unskilled labor force.
Refund claims of exporters amounting to Rs. 300 billion are already stuck up creating liquidity crunch for the industry while uncertain economic environment has slowed down the investment to almost zero. Moreover, the devaluation of Rupee by more than 30 percent has failed to increase exports.
FPCCI leaders noted withdrawal of this facility would increase cost of doing business due to 17 percent sales tax and high utility cost, as Pakistan’s exports is already facing a tough competition in international market due to enormous facilities given by the regional countries to their exporters.
They further stated that government should find new avenues for enhancement of its revenue instead of damaging the exports sector which is already on a decline. They further suggested that the government should facilitate the industrialization in Pakistan particularly the agro-based and value added industries for the enhancement of exports.