KARACHI: Leaders of the five export sectors, including textile, leather, sports, surgical and carpet, on Wednesday threatened to shut down their units and go on a countrywide strike if the government increases sales tax rate from two to five per cent on exports.

In a joint press conference held at the PHMA House, they were critical of the government for proposing 3pc increase in sales tax on exports though it promised to reverse the decision of the previous government that imposed two per cent tax.

They said that exports need to be incentivised. They reminded of falling (-1.57pc July -March) exports despite GSP Plus. They said the country would not be able to achieve export of $26 billion target set in the textile policy.

They regretted that the export sector is burdened with high power and gas tariffs that erodes its competitiveness and again mentioned the issue of unsettled claims.

Giving details, these leaders said that Rs70bn is outstanding with the government against sales tax refund, Rs10bn against customs rebate and Rs160bn in drawbacks on local taxes and levies (DLTL) allowed under the Textile Policy 2009-14.

They lamented that the Federal Board of Revenue (FBR) squeezes those existing taxpayers, instead of widening the tax net.

Published in Dawn, May 7th, 2015

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