Exporters demand concessions to meet export targets

Tuesday June 30, 2009

FAISALABAD: Textile exporters could bring in $25 billion forex from exports in the next two years and 120 billion during the next 10 years, if they were provided a level playing field and productivity-conducive consistencies, claimed Azhar Majeed Sheikh Chairman FPCCI (Federation of Pakistan Chambers of Commerce and Industry) Standing committee on export trade, here Monday, in post-budget proposals to Shaukat Tarin, Advisor Finance.

A major issue pertaining to exports still remained unattended and unsettled, he said. Pin pointing the major irritants he advocated that exports should be zero-rated, as exporters were heavily burdened with 6.8% local taxes, whereas China, India, Bangladesh's exporters got 17% incentives. The difference with regional players was 25%, he said and demanded a 8% minimum, duty draw-back against local taxes for a level playing-field.

The 10% regulatory duty on pigment-thickeners should also be withdrawn, he said. Similarly, any projected increase in the Polyester fibre duty would also scuttle the power-loom sector, he asserted. He also demanded an exemption of federal excise duty on insurance, banking, port and terminal operations for zero-rating purposes. Yet another demand was the refund of duty draw-back and Sales tax at the time of negotiations in banks.

As is the case with the deduction of income tax, he also demanded the payment of the pending refunds of earlier years, and also the release of 60% R&D claims. Pointing at the inconsistent and detrimental Monetary and Energy Policy's shortcomings, he said that the financial cost of credit borrowings, all over the world, was 0.4%, but in Pakistan, it was 14 to 18%.

Lamenting the tremendous increase in electricity and gas prices, he demanded a 10% deduction in gas prices, as well as mandatory exemption for textiles from gas load-shedding, to allow it to fulfil its export commitments. Azhar Majeed Sheikh demanded that free access of Bangladesh and other regional countries to Europe and America be offset through export incentives to the local industry.

These constraints had put exporters in a very difficult cash-flow situation, he contested and demanded the capping of the mark-up rate on various products to 7.5%, and the freezing of the earlier accumulated mark-up for 2years and the provision of Rs 40 billion for direct cash support to the export industry. He gave the assurance that if irritants were removed, a level playing field provided and export-conducive measures enforced, exporters would achieve the high targets for exports.


(BRecorder)