ISLAMABAD: The government on Friday promised full payment of refunds to exporters within the current month following complaints that export industries were facing liquidity crunch due to non-payment of rebates and tax refunds.

The decision was reached at a meeting presided over by Finance Adviser Dr Abdul Hafeez Shaikh with representatives of export sectors.

It discussed issues exporters had been facing after the outbreak of coronavirus and the evolving position of the global economies and its impact on the local sector. Commerce and austerity advisers were also present during the meeting.

The delegation briefed Shaikh that due to the coronavirus pandemic, global economies have gone into a recessionary phase and demand for their products, especially apparel, had reduced considerably. Exports, which had shown an improvement in February and March, will receive a setback in the coming months, the government team was explained.

In view of the changing position of global trade, they had been facing problems with their cash flow situation and need help and assistance from the government mainly in expediting the re-payments/refunds due so that they could come out of this crisis and could resume their business as early as possible.

The delegation presented a list of proposals that could help improve on their liquidity position and to run businesses in the current situation when they are not expecting further orders and faster recoveries from international buyers. It apprised the government that they had decided not to lay off their daily wage staff in this difficult time.

Shaikh assured the exporters that the government had no desire or policy to keep the money even a day longer and nor find any reason to delay the repayments. Theey were told that the government would do anything possible to ease out the exporters and was committed to provide relief with earlier repayments of rebates, duty drawback and GST refunds.

The adviser also committed that GST refunds will be cleared by end of March and export rebates will be granted within April. He directed Secretary Finance and FBR chairperson to hold meetings with the relevant stakeholders and provide relief to the export sector as much possible.

The government team also appreciated the decision taken by All Pakistan Textile Mills Associations not to lay off their labour in time of crisis and advised them to take care of their workers.

The textile exporters complained that FBR system did not cater for additional sales tax being collected on account of 3pc ad valorem under the 12th schedule. As a result, claims were being rejected as the portal wrongly classified them as commercial importers.

They reported total refundable sales tax amounts of about Rs155bn so far and the FASTER programme was not properly functional. The textile exporters told the government that they were facing liquidity crunch while the Europeans buyers had requested deferment of cargos following COVID-19 crisis.

Published in Dawn, March 21st, 2020