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Lahore
Lahore Chamber of Commerce and Industry has urged government to immediately restore zero-rating regime for five export industries.
While talking to a group of leading exporters, LCCI President Almas Hyder said the withdrawal of the zero-rating regime will badly hit the country’s exports, bring massive pressure on exporters, especially small and medium businesses, and widen the trade deficit at the cost of ballooning current account gap.
He said that government should suspend the implementation of the decision till an effective and efficient mechanism for refund of export tax claims is put in place.
He said at time the businesses are already affected because of the ongoing major changes in the country’s legal and tax landscape and another variable in these conditions will add to the miseries of the business community.
He said that if government goes with its decision, the exporting sector would be facing cash problem because in just three transactions their liquidity will shrink as the government is not in the habit of refunding the exporters’ claims. “Definitely the inordinate delays in tax refunds to exporters are a longstanding issue of the business community”, the LCCI President added.
Almas Hyder said that Small & Medium Enterprises (SMEs) cannot afford to create debt at such a high markup. While elaborating the point, he said that if they are not getting refunds, they would be reaching banks for borrowing due to financial crunch.
“Textiles, leather, carpets, surgical instruments and sports goods as major part of exports is associated with these sectors”, they said and added that five-zero rating sectors are documented and contributing around 70% of total exports and 50% in employment”, the LCCI president said and added that withdrawal of zero-rated facility will push these sectors towards a disaster which can easily be averted
He said that exports of the country are already at a crucial stage because of poor ranking in ease of doing business, high input cost and a large number of duties and taxes. He said that any step in wrong direction like discontinuation of zero-rating regime will pose immense economic challenges.
He said that government should restore zero-rating for export sectors till an assured refunds system is in place. He said that this is the demand of all exporters who are the backbone of the economy. If they are not given comfort, the current account deficit will widened that will bring more economic challenges.
