APTMA has rejected the proposed budget for FY 20-21 as it completely failed to address serious industry issues in the light of the worldwide COVID-19 created crisis. This is likely to lead to large scale unemployment and closures and as the market dynamics have changed Post COVID-19 situation. APTMA has demanded the following provisions from the government
Elimination of 1.5 percent turnover Tax: This tax increases cost of exports by an average 5-6 percent as the tax is levied on the same goods multiple times as it passes through the value chain. The Textile Industry works on very slim margins and turnover tax acts as an accelerator to early closure of mills.
Seven per cent custom duty on MMF & Polyester Staple Fiber: There is 7 per cent customs duty on the import of polyester staple fiber with total import expenses in the range of 20 per cent including antidumping duty. More than 60 per cent of world textile trade is in MMF materials and this duty protection given to obsolete plants in Pakistan is denying the Pakistani industry any chance to compete in this growing majority section internationally or domestically. Any protection to domestic polyester plants may be given directly by the government and not at the cost of our country’s economic future.
DLTL: With refunds of approximately 5 percent due on $ 10 billion exports the quantum of DLTL due will be Rs 80 billion. This was also the amount requested for allocation by Ministry of Commerce. The budget has allocated only Rs 10 billion for DLTL. DLTL is a calculation of government taxes component in the cost of exports and if this is not catered for will further weaken our export competiveness.
TUFF: Rs 4.5 billion are pending under TUFF scheme whereas amount allocated in this budget for TUF scheme is only Rs 400 million. The amounts have been due for the past 7 years and this sort of delay annuls industries’ faith in Government commitments.
New Textile Policy: Implementation of the in principle approved Textile Policy is required in true letter and spirit for Pakistan to maintain and increase employment and exports.
