Vice Chairman of All Pakistan Textile Mills Association (APTMA) Zahid Mazhar says that the government lost a golden chance to revive the economy of the country.
Zahid expressed his concerns over the measures that the government has taken in the budget, saying that no support has been provided to the export sector including textiles. He believes that the government should have brought up fundamental reforms in order to encourage the export sector.
The textile industry had asked the government to reduce the turnover tax in the upcoming budget, however the rate was increased from 1% to 1.25%. The government also imposed tax supplies to unregistered person of 2% while the textile sector already has 2% tax imposed. Zahid added that the impact of 2% is also on the sector as the end users don’t pay this tax.
The increase in taxes on the sector will further burden the companies with additional costs despite the fact that the textile sector earns more than 60% of foreign exchange through exports.
Zahid expects that the government should take concrete steps to revive the export sector. The export package that was announced by Prime Minister Nawaz Sharif has also not been given.
Through the package, Rs. 180 billion had to be paid over the next 18 months with monthly payments of Rs. 10 billion per month. Nonetheless, up till now only Rs. 1 billion has been released by the State Bank of Pakistan and only Rs. 4 billion have been allocated. Zahid urged the government to implement the package that was announced by the Prime Minister in order to curb the decline in exports of textiles.
Even the high cost of energy and gas has further aggravated the situation for the textile sector due to high rates. Earlier Chairman APTMA Aamir Fayyaz had also criticized the decision to allocate only Rs. 4 billion out of the Rs. 180 billion package announced by the Prime Minister.