LAHORE, June 13: The levy of one per cent special surcharge on all imports, including raw material, machinery and spares of textile industry; and 15 per cent increase in minimum wages will put a total of Rs5.370 billion additional financial burden on country’s spinning industry during the next financial year, an industry leader says.

All-Pakistan Textile Mills Association (Aptma) chairman Shafqat Elahi told Dawn on Wednesday that the imposition of surcharge would cost the industry Rs2.4 billion while increase in wages would put a burden of Rs2.97 billion.

Nonetheless, he said, he had been assured by the Central Board of Revenue (CBR) that the government will consider exemption on import of raw material – cotton and man-made fibre. But the government does not seem to be in a mood to exempt import of machinery and spares from new surcharge, he said.

Even if raw material is exempted from surcharge it would reduce the additional burden on industry by Rs2.243 billion, he said.

The government has imposed special surcharge on all imports, excluding vegetables, pulses, edible oil, petroleum products, medicines and fertilizers, to discourage imports and reduce record trade and current account deficit. It has also increased minimum wages to Rs4,600 from Rs4,000.

“We understand that in a low-wage country, like Pakistan, the government has to increase wages. But the industry must be compensated in some other way for the additional burden so that it can stay competitive in the world market,” Shafqat said.Pakistan Readymade Garments Manufacturers & Exporters Association chairman Ijaz Khokhar told this reporter from Sialkot by telephone that the increase in their cost would hit the efforts to increase value-added exports.

He said the government must take immediate notice of the situation and provide real relief to the industry to save it from being collapsed.