KARACHI, March 8: The Pakistan Hosiery Manufacturers Association (PHMA) has taken a strong exception of the increase in export refinance rate by half a percentage point to 4.5 per cent from this month.

In a statement issued here on Tuesday, PHMA Chairman Aslam Ahmed Karsaz pointed out that the decision would hurt exports of value-added textiles as the exporters would get export financing at six per cent from commercial banks.

He said the value-added knitwear industry was already reeling and was at the verge of collapse owing to the end of textile quota regime. "The exporters of value-added textiles are already paying exorbitant electricity and gas charges, which raise their cost of production."

Mr Karsaz suggested that the government should immediately come out with a relief package to save the value-added apparel industry. He demanded that the rate of rebate should be enhanced to 12 per cent and all textile exports be removed from the ambit of sales tax.

The PHMA chief also demanded of the government to immediately withdraw a seven per cent commission on export of yarn, and all ancillary industry, including knitting, processing, etc., be exempted from income tax.

He also appealed to State Bank Governor Dr Ishrat Hussain to de-link the export refinance rate from the weighted average yield on six-month bills so that some of the burden on exporters was eased, making them competitive in the world market.