LAHORE, June 1: The All-Pakistan Textile Mills Association (Aptma) has welcomed the federal budget 2012-13, saying most of its demands, including reduction in turnover tax, withholding tax on bank withdrawals, Income Tax exemption and zero-rating of sizing and warping and weaving industries have been met by the government.

“The textile industry will benefit from the measures taken in the budget and reduction in turnover tax from one to 0.5 per cent will benefit the textile sector due to low profitability under prevailing circumstances, said Aptma chairman Mohsin Aziz.

Mohsin Aziz said the Aptma had asked the government to reduce withholding tax on bank withdrawal up to 50000, which it agreed.

He said that the allocation of Rs10 billion for EDF fund would develop exports. He said the present budget was the most difficult one keeping in view the prevailing odd circumstances. The government increased the limit for Income Tax from Rs300,000 to Rs400,000, but the Aptma urged it to take it up to Rs500,000,” he said, terming the budget a balanced one.

The Aptma Group Leader Gohar Ejaz, however, mentioned that three measures were still missing: a growth strategy to bring investment back to the country by reducing the interest rate to seven per cent, recognition of non-target subsidy on electricity and absence of vision on allocation of Rs200 billion for 20,000MW new power plants.

He said the government had allocated Rs134 billion as a targeted subsidy on electricity against an actual demand of Rs400 billion. The budget documents, he said, were not clear on the remaining Rs260 billion which could only be materialised by equalising the tariff or allocating actual loss in the budget.

Gohar said that turnover tax would provide a relief of Rs13.5 billion per annum to the textile industry. He said that reduction in turnover tax from 1 per cent to 0.5 per cent would provide an overall benefit of Rs22.5 billion per annum to the business community.