Pakistan’s textile mills have welcomed the announcement of the zero rating regime for the textile industry. Tariq Saud, Chairman, All Pakistan Textile Mills Association (APTMA) hailed the government specially the FM and said in a statement that reintroduction of Zero Rating or No-Tax and No-Refund Regime for the textile sector which is the major export oriented sector and contributes more than 55 per cent of foreign exchange earnings through exports is a positive step toward the restoration of viability of the ailing textile sector. He said that APTMA was demanding zero-rating regime and met the Finance Minister last Sunday in this regard and convinced him that the viability of textile industry is must for the economic growth of the country.
Now they want local taxes and levies on exports to be returned to ensure a complete zero rate regime otherwise the textile industry would remain unviable. They also want the complete zero rating regime to be extended throughout the value added chain. All taxes and levies should be either removed or returned in actual, not incremental form, under the Drawback of Local Taxes and Levies (DLTL).
The value-added textile industry has also welcomed the reduction in export refinance and the introduction of the zero rating regime. It says the introduction of the zero rating regime would be beneficial to the cottage industry of Sialkot, which is facing the problem of liquidity cash flow. However it says four per cent DLTL should be offered to all export items to bring growth to the sector. The reduction in the refinance rate to three per cent has been welcomed. Regarding duty free import of machinery, the value-added textile industry says there should be duty free import of spare parts to make this offer more comprehensive and ensure modernisation of the value-added industry. It wants payment of all stuck-up refunds by August 31 to resolve the liquidity issue.