Last budget incentives for textile sector not implemented yet


Lahore: The Pakistan Readymade Garments Manufacturers and Exporters Association has called for giving special status to export-oriented value-added textile industry allowing it zero rating facility to boost new investment and revive economic growth.

“Value-added textile sector should be given special status by separating it from other textile chains as it is generating more employment and more revenue.”

PRGEMA central chairman, Ijaz Khokhar, and vice chairman, Malik Naseer, in a joint statement, said that more than 30% working capital of textile sector is stuck-up under refund regime, because several incentives announced in previous budget 2014-15, including ‘Rationalization of Refund Regime’ and ‘Complete Settlement of all Outstanding Refund Claims till 2014’ could not be implemented so far.

Pakistan textile policy for 2009-14 with outlay of PKR 188 Billion could be implemented only 15%, Ijaz Khokhar said and added that textile policy 2014-19 with total outlay of PKR 64 Billion was announced with a long delay and its notification is not issued yet.

‘No Tax-No Refund’ formula should be applied on value-added textile chain, including it in zero rated regime in order to get rid of liquidity crunch.

Ijaz Khokhar suggested that the FBR to evolve a mechanism to eliminate liquidity problems of refund claimants and frivolous litigation pertaining to refunds. “Sales tax refund should be processed in minimum possible time in a transparent manner and FBR should streamline the entire refund verification and sanctioning process to facilitate the whole export-oriented sector”

PRGMEA’s Central Chairman also called for setting up more training institutes for skill development in textile industry by utilizing Export Development Fund (EDF). The association is already playing its role in setting up and successfully running these institutes. The EDF is purely for development of export infrastructure but it is collected from value-added textile sector and consumed anywhere else.

PRGMEA Vice Chairman, Malik Naseer, said that Punjab industry is not utilizing its installed capacity fully due to severe energy shortage and exports would not get momentum unless the government takes serious measures to pull textile sector out of crisis that holds back the textile industry.

He was of the view that value-added textile sector is the most important segment of textile sector and the national economy, but it is facing crisis, as production is not in accordance with the built up manufacturing capacity. Due to this under-utilization, the country is not fetching the full potential of foreign exchange earnings.

Malik Naseer asked the government to enhance industrial production to accelerate economic growth and generate vast opportunities of employment.

Textile sector is getting just one third of allocated gas supply though domestic demand has dipped significantly on rising temperature. Insufficient energy supplies, rising cost of doing-business and lack of necessary funds are the major causes for the erosion in the industry’s viability. Value-added textile industry is the only hope for revival of country’s economy which is currently jolted by high cost of doing-business.

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