Unavailability of cotton yarn and non-payment of duty drawback of taxes
and income tax refunds are adversely affecting the export growth putting
millions of dollars export orders at stake. Government must accord
immediate remedial measures as further delay will seize the
industrialization, halt the export growth and lead to an unmanageable level
of unemployment.
Talking to media here on Thursday, Chairman of the Pakistan Textile
Exporters Association (PTEA) Muhammad Ahmad expressed grave concern
over cotton yarn crisis. Extreme shortage of cotton & unprecedented price
hike of cotton yarn has almost disrupted the export cycle and textile
industry has become economically unviable due to escalating prices on the
back of short crop, he lamented.
Cotton production is set to drop to a historic low during the year when
demand is up by 13% with the textile sector operating at full capacity after
decades, he added. With low production, country needs to import cotton in
an effort to bridge the demand-supply gap. Low cotton productivity and ban
on cross-border cotton import has spiked the price of cotton yarn and textile
exporters are forced to pay a higher price for raw materials.
He appreciated the Prime Minister Imran Khan for taking serious notice of
cotton shortage and allowing the import from Afghanistan and Central
Asian States via Torkham land route; however he considered it insufficient
to meet the apparel industry’s raw material needs as importing yarn from
central Asian countries is not only expensive but will take one to two months
to reach Pakistan. In order to overcome the scarcity of basic raw material,
he demanded a cross-border import of cotton yarn from India to ensure
continuity in export growth.
Patron-in-Chief PTEA Khurram Mukhtar expressed concern over undue
delay in disbursement of exporters’ Duty Drawback of Taxes and Income
Tax refunds (over Rs. 50 million) as exporters’ liquidity has already taken a
strong negative hit from adverse impacts of Covid-19. Government must
take immediate measures to ease off the financial stress and gear up the
export growth, he said. Giving details, he said that outstanding amounts of
Duty Drawback of Taxes have been accumulated approx. Rs. 30 billion;
resultantly textile exporters are facing severe financial issues.
He maintained that in order to support the textile export industry during
challenging times of Covid-19, the government made payment of Income
Tax refunds up to Rs. 50 million; however, refund claims beyond Rs. 50
million are still pending. Claims even processed and ready for payment are
not being disbursed. He stressed for immediate disbursement of Income
Tax Refunds (over Rs. 50 million) & Duty Drawback of Taxes to address the
financial issues of exporters.
Vice Chairman of PTEA Saqib Majeed was of the view that undue delay in
approval of Textile Policy is resulting in deferral or even backing out of
investors from possible investments in the textile chain. Implementation of
textile policy would attract domestic and foreign investment in the textile
value chain and the development of value-added sectors.
He demanded immediate approval and implementation of textile policy to
pick-up the growth pace of the textile value chain. He said that global
markets are wide open and Pakistan can achieve significant increase in
exports by encouraging investment in addition to enhancing
competitiveness.
It is the right time to facilitate the export sectors as we direly need to
stabilize the economy because only the export sector has the ability to put
the country’s economy on track and steer Pakistan towards economic
prosperity. He demanded immediate payment of all outstanding refunds to
robust the industrialization, increase exports and generate new job
opportunities.
Source: The Daily Times, Pakistan Friday, 12 March 2021