Five zero-rated sectors threaten to go on strike

Updated June 11, 2019

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Textile, sports, surgical goods, leather and carpet sector say strike to protest withdrawal of zero-rated regime. — Dawn/File
Textile, sports, surgical goods, leather and carpet sector say strike to protest withdrawal of zero-rated regime. — Dawn/File

KARACHI: The leaders of five value-added sectors have threatened to go on strike if the government withdraws zero-rated regime on their exports in the 2019-20 budget to be unveiled on Tuesday.

Addressing a press conference at Karachi Press Club on Monday, they said the withdrawal of this facility would serve no purpose and result in a liquidity crunch for the export-oriented sectors.

They alleged that all of this was being done to create liquidity for the government at the cost of country’s exports, which engages over a workforce of over one million people.

The representatives of these five sectors — textile, sports, surgical goods, leather and carpet — were critical of the government for taking such a decision at a time when exports are about to take off as a result of devaluation.

According to them, the initial impact of the recent rupee devaluation saw exports rise by 29 per cent in terms of rupee and 0.2pc in dollar.

They claimed that during negotiations with the government, it was initially stated that 16-17pc sales tax would be imposed on exports to be refunded later. However, the last offer put that figure only at 7.5pc.

Responding to a question, Zubair Motiwala — leader of the forum of five-zero rated sectors — said currently only 20pc of textiles constitute local sales, 1pc carpets, 5-7pc surgical goods whereas leather goods are all exports.

Published in Dawn, June 11th, 2019