Lahore
The Pakistan Industrial and Traders Associations Front (PIAF) has called for early refunds of sales tax, income tax and customs rebate to the industry, as exporters’ refunds stuck up amount has mounted to billions of rupees, leading to hamper their business activities.
PIAF Chairman Faheem ur Rehman Saigol, expressing the need for solid steps and consistency in policies, observed that value-added exports should be increased to get rid of external debts, dictation of IMF and other international financial institutions.
He urged the government to take immediate measures to ease off the financial stress and gear up the export growth.
The PIAF appeals the government to take immediate measures to arrest the slowdown in exports, as the unfriendly policies would bring Pakistan’s most valuable sector on the verge of collapse, he warned.
He said that the export sector is playing a pivotal role in foreign exchange earnings, besides absorbing the inefficiencies of the energy sector and paying the burden of other consumers, he added.
PIAF Chairman lamented that the government had committed with the exporters that refunds payment orders would be issued in 24 hours while the payments would be cleared within 72 hours of the issuance of the RPOs but practically this commitment is not being fulfilled, as the 72 hours are being extended to several weeks.
Despite all the commitments, FBR has failed to pay the sales tax refunds of zero-rated export sector within 72 hours. Consequently, they are unable to procure raw materials and other accessories to execute their orders and this will ultimately affect the country’s foreign exchange reserves.
He said that the severe liquidity crunch is adversely impacting the export growth, as the country’s textile exports have declined by 15.23 percent in Oct 2022 to $1.35 billion, amidst undue delay of sales refunds by the Federal Board of Revenue.
Faheem Saigol expressed his serious concern over declining trend in textile exports, which has dropped by 1.34 percent to $5.941 billion during the first four months of July-Oct in current fiscal year against $6.021 billion of the same period of last year.
Referring to the Pakistan Bureau of Statistics (PBS), he said that the country’s textile group exports witnessed a decline of 15.23 percent in October 2022 on a year-on-year basis and remained at $1.36 billion when compared to $1.6 billion during the same month of last year.
On a month-on-month basis, the textile group registered 11.13 per cent negative growth compared to $1.53 billion in September 2022.
Raw cotton exports registered 100 per cent growth in July-October 2022-23 on a YoY basis. Cotton yarn exports registered 27.73 per cent negative growth in July-October and remained $285.315 million compared to $394.765 million during the same period of the last year.
On a year-on-year basis, cotton yarn exports registered 53.79 per cent negative growth, while on a MoM basis, it registered 35.30 per cent negative growth. He said the government and all the stakeholders should make decisions in the national interest with confidence.
He demanded that electricity and gas prices for the whole industry be maintained for next year to sustain the previous exports growth. The government should continue the regionally competitive power tariff for the export-oriented sector to sustain and uplift exports. These rates should continue till at least FY23 to bring the sustainability factor as the sector contributes significantly to overall national exports. If this sector gets no relief, that will ultimately impact the overall economy, he added.
