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Pakistan: FBR laws hampering growth in textile sector

Value-added textile manufacturers-cum-exporters want to get rid of double taxations and ‘draconian’ excise laws, which have stagnated the entire sector's growth. Scores of representatives from different value-added textile associations recently held a meeting with Federal Secretary Commerce Qasim M Niaz, seeking an immediate end to their long-running problems.

Chairman Council of All Pakistan Textile Associations (Capta), Zubair Motiwala led the exporters to discuss the key obstacles to the sector's growth. He said the Federal government should abolish two per cent GST from the zero-rated sectors to ease their financial positions.

“The exporters are in deep financial problems from double taxations by the federal government of two per cent GST and the second by the provincial government 16 per cent on services,” he pointed out. He said customs officials are altogether indifferent to the significance of exports to the national economy as they never stay back from creating hurdles on import and export stages to perturb the stakeholders. He also pointed out four excise laws which are hitting the entire textile sector, saying that the FBR deceptively made them part of sales tax, forcing the exporters to pay the taxes anyhow.

The FBR laws of GST on selling of goods to unregistered companies are still dubious, creating problems for exporters. "Everybody is violating the law. We are under offensive," he said. Without bribe no tax refund is possible, he claimed, saying the FBR's laws and regulations are against the growth of entire textile sector.

Motiwala said the poor utility supplies with soaring tariffs wrecked havoc on the textile sector restricting its export to not more than $7 billion annually. He said the government is unjustified to force textile sector to pay bills for power thieves. With raw material like cotton or yarn, the annual textile exports stand at between $11 billion and $13 billion, he said.

The government's utility tariff plans give two messages to consumers -- either to pay bills for power thieves or just indulge in the theft. He urged the government to play its role against power thieves to end power shortage. "Some 35 per cent power loss comes through three ways: theft, line losses and pilferage," he added. He also resented soaring gas, power and water tariff which is unprecedented in entire history, saying gas was made expensive by 17 per cent and power by Rs 4 per unit. He said the government continues to bypass Ogra to set prices for key utilities.


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