KARACHI, June 9: Exporters have expressed displeasure over the 2007-08 budget proposals and feel that it totally lacks measures to support the dwindling export trade and make it competitive in the world market.
The Minister of State for Finance Omar Ayub Khan while presenting the budget proposal in the National Assembly on Saturday, announced a number of relief measures for other sectors of the economy but did not come up with any significant steps to cut the rapidly rising cost of production, leaders of export trade told Dawn.
On the contrary the cost of production has been increased by measures like minimum wages increased from Rs4,000 to Rs4,600 and enhancing group insurance amount from Rs0.2 million to Rs0.3 million, said the exporters.
Chairman Pakistan Hosiery Manufacturers Association (PHMA) Naqi Bari said the budget proposals had disappointed the value-added apparel sector, which had been holding meetings with the policy makers to ensure a level-playing field with the exporters of neighbouring countries.
He said the export trade never demanded any benefit or relief to enhance its profits or margins rather it has been a fight for survival in order to keep country’s exports viable and competitive in the world market.
Shabir Ahmed, chairman Pakistan Bedwear Exporters Association (PBEA) said that if the government could give relief to the growers on power consumption in tube wells by giving 25 per cent subsidy, there is no reason that the same could not be allowed to the export trade.
The most shocking measures taken by the policy makers is with regard to reduction in withholding tax on export of yarn from 1.25 to 1 per cent whereas value-added sector will continue to pay 1 per cent withholding tax on its export proceeds.
The least could have been done was to zero rate export of value-added textile products because this would have made a lot of difference to export trade which had been fighting war of survival owing to lower cost of production in the region.
Former chairman Korangi Association of Trade and Industry (Kati) said that the export trade had been demanding of the government to provide gas to the export industry at the rate given to the fertiliser industry to enable it to cut its cost of production.
Instead of taking such measures, he said the new budget has further enhanced the cost of export trade by increasing minimum wages and increasing group insurance amount.
Fawad Ejaz Khan, former chairman Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea) said that the levy of special surcharge of one per cent on all imports including raw material the cost of production would further rise.
He said export trade had been totally ignored in the new budget and apprehended that this would cripple the export industry because by increasing minimum wages a multiplying effect on cost of production would take place.
Pakistan Commodity Importers Association (PCIA) Chairman Raees Ashraf Tarmohammad said the disparity between the commercial and industrial importer has not been removed. He said that 6 per cent withholding tax being paid by commercial importers against nominal or zero rate tax by industrial importer is disappointing.
