Ahmed Chinoy Chairman of Pakistan Cloth Merchants Association requested the Government to remove major hindrances which are identified by the Textile Industry in the upcoming budget 2020-21. He said the Textile Industries have potential to uplift the economy if the Government of Pakistan provide them level playing field and support the Textile Industry. He said Pakistan improvement in the country’s ranking on the World Bank’s Ease of Doing Business by 28 places to 108 in 2019.

Restore Zero Rating on GST – “No Payment No Refund Regime” through revival of of SRO 1125. The duty drawback of Taxes (DDT) should be increased from half and it must be fully paid. Withholding Tax (WHT) should be reduced from 1% to 0% for exporters custom rebate should be refunded electronically through SBP along with export proceeds. Reduction in duties and taxes on import of raw material used by Textile Industry. Suspend collection Export Development Surcharge till unitized amount of Export Development Fund (EDF). Outstanding payment of Technology Up-graduation Fund (TUF) Schemes reinstate TUF Scheme in upcoming Textile Policy. Restoration of Income Tax Credit U/S 65(B) to encourage BMR and also include proprietorship & AOP with companies. EOBI and Social Security contributions should be borne by Government on behalf of textile industry for FY 2020-21. Reinstate omitted sub-section (b) and (c) of clause 10 of SRO 327 of Export Oriented Units vide SRO 747(1)/2019. Energy Tariff @ 7.5 cents/KWh. RLNG @ US $ 6.5/MMBTU.

Chairman of PCMA said that the ranking will be decrease from 108 places if the government should provide a business-friendly and hassle-free environment to invite more domestic as well as foreign investments. He also stressed the need to take the business community on board to generate a meaningful dialogue when various regulations and procedures are introduce for development of textile industries as per best global practices to achieve the intended goals.

The major issues being faced by the industry as well as hurdles in enhancing exports. The Federal Board of Revenue (FBR) collects sales tax on value added items at each stage but the refunds are only available after export and this is how the FBR is overstating its revenue collection by Rs22 billion per month which is actually refundable.
Textile industry collected Rs108 billion in last five months of the ongoing financial year 2019-20 out of which it only paid Rs15 billion in refunds putting industry in hot waters as that had triggered a huge liquidity crisis. Owing to this fact, the industry is unable to meet export orders and cannot expand its operations to create exports surplus..

Ahmed Chinoy said the Prime Minister of Pakistan and his economic team take prompt measures to facilitate the Textile Industries to ease the liquidity pressure by releasing long overdue refunds stuck with Government to support the export industry in the prevailing challenging scenario amid COVID-19. In view of global business slowdown textile export industry of Pakistan has suffered a lot.