Tanners slam zero rating withdrawal plan

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LAHORE: Opposing the plan of the Federal Board of Revenue to withdraw sales tax zero-rating from certain export items on the excuse of generating more revenue Pakistan Tanners Association Central Chairman Agha Saiddain has said that unthoughtful decision would adversely affect exports at a time when huge amount of sales tax refunds are already stuck up with the FBR and exporters are facing liquidity crunch.

The chairman PTA on Friday warned the FBR Chairman Ali Arshad Hakim against revision of zero-rating scheme in view of the existing huge trade gap of $21.271 billion. Total exports of Pakistan were $23.641 billion against total imports of $44.912 billion during 2011 –12.


The government may study export policies of India, China, and Bangladesh where exporters are facilitated through export friendly policies, he said and added the FBR should announce export friendly policies instead of creating difficulties for the industry.


PTA central chairman said that Pakistan’s leather products export volume could be escalated to $3 billion from existing about $1.048 billion if the government takes all stakeholders on board and finalise export policies with their consultations. He asked the authorities to take representatives of export-oriented industries on board for evolving an effective and result-oriented trade and export policies that could help achieve desirable goal of increasing exports.

“This huge trade gap has resulted into inflation and devaluation of Pak Rupee. If zero-rating from five sectors i.e. textile, leather, carpets, sports and surgical is withdrawn, it will adversely affect our exports,” he said.


He gave an example of leather sector in South Asia where China, India and Bangladesh recorded growth rate of 47 percent, 40 percent, and 71 percent, respectively in last five years whereas in Pakistan exports of leather sector declined by 14 per cent


He added that the Indian commerce minister issued a statement that India would export goods not taxes. He said export items must shed all duties and taxes within India before these are exported. Agha said duty drawback rates in India are 6 percent, 9.2 percent, 9.8 percent and 7.7 percent for finished leather, leather footwear, leather garment and leather gloves respectively as against 0.82 percent 1.82 percent, 4.26 percent and 1.54 percent respectively, in Pakistan. He said how duty drawback can be higher in India where most of the inputs like chemical etc. are indigenous. He stressed for export friendly policies to stop flight of capital and save the Industry.


Courtesy:  The News

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