10pc regulatory duty on used clothes slammed

Updated July 02, 2019

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A family rummages through secondhand clothes at Bohar Wala Chowk Landa Bazaar in Lahore in this file photo. Middle and lower income Pakistanis are finding it difficult to buy used clothing items following an increase in regulatory duty.
A family rummages through secondhand clothes at Bohar Wala Chowk Landa Bazaar in Lahore in this file photo. Middle and lower income Pakistanis are finding it difficult to buy used clothing items following an increase in regulatory duty.

KARACHI: The Pakistan Second Hand Clothing Merchants Association (PSHCMA) on Monday urged the government to remove 10 per cent regulatory duty (RD) on used clothes imports. It further called for the need to bring down withholding tax to 1pc from current 6pc in order to offset the impact of rising landing cost of imported items due to rupee depreciation against the dollar.

Calling the 10pc RD unjust, the PSHCMA said the move was making the life of middle and lower income people difficult.

“The government is treating old clothes as luxury items by imposing RD on these items. For us, imports are already getting costlier owing to losing strength of

the rupee against the dollar since January 2018 when one dollar was equal to Rs110 as against current rate of Rs160,” PSHCMA General Secretary Usman Farooqui said.

“A large number of people still rely on used items as they cannot afford costly brand new items.

There is no need for imposing additional duty on these items which are already burdened with 6pc withholding tax, 5pc sales tax and 5pc import duty,” he added.

Pakistan imports used ladies garments, gents’ trousers and shirts, blankets, warm clothing, winter garments, shoes, etc mainly from USA and Europe.

According to the figures of Pakistan Bureau of Statistics (PBS), import of worn clothing rose to 426,797 tonnes valuing $165 million in 11MFY19 as against 404,737 tonnes worth $148m in same period last fiscal.

While recalling that every government in previous years had supported used cloth imports on falling rupee value against the dollar, he said the PPP government had slashed customs duty on import to 10pc from 20pc while the Musharraf government removed 16pc sales tax on imports.

Published in Dawn, July 2nd, 2019