KARACHI, July 2: The export-oriented industry is demanding of the government to give it export processing unit (EPU) status to reduce its involvement in non-productive and cumbersome procedures required to meet local compliances and levies collected by around 36 federal and provincial agencies.
It is strongly advocated that since the government has taken a revolutionary step in the new budget by making all the five exporting industrial sectors under the zero-rated sales tax regime, therefore, it will be in the best interest of the country to also give the export industry the EPU status.
The industry feels that the government should also show its courage on the matter that has been pending and the successive governments promised not only to give the export-oriented industry the EPU status, but also provide a ‘one-window’ facility for collecting numerous taxes and levies on behalf of these agencies.
The industry has been complaining that these agencies do not only waste much of their time, but also harass the industry by seeking ‘illegal gratification’ even after getting the officially fixed amount of taxes and levies form trade and industry.
The industry has to fight on many internal and external fronts which results in waste of time on getting involvement with these agencies that ultimately results in poor quality of products, inconsistency in production and above all in the absence of research and development no new products or designing could be made.
On the external front, tough and cutthroat competition is presently going on, as countries like China, Bangladesh and India are better placed in terms of cost of production and are gradually expanding their market share at the cost of those countries that did not prepare themselves for the WTO quota-free regime.
Had the decision of putting the five export-oriented industries on zero-rated sales tax taken even a couple of years back, it would have helped the industry become stable ahead of the quota-free regime started on January 1, 2005.
Another core issue the export industry is confronting and is perturbed over the apathy and lack of interest from the government departments concerned is poor infrastructure. There is hardly any worth mentioning and reliable source of basic utilities like water, power and gas, and roads are in dilapidated conditions in almost every industrial estate of the country.
Pakistan Hosiery Manufacturers Association chief coordinator Jawaid Bilwani told Dawn: “Today our industry is bogged down with petty issues and instead of giving time for product development and research work it has to run from pillar to post for getting utilities.”
“Due to lack of proper infrastructure, the industry could not maintain quality and has to suffer huge losses because of frequent power breakdowns, shortage of water and worsening sewerage problems,” Mr Bilwani lamented.
The only way out is, he said, was to grant the EPU status to these major five exporting industries and to those industrial units which have over 80 per cent of their production in exports. Similarly, he said the infrastructure improvement job should be taken as a national challenge and a policy framework should be made to face this problem on well focused and targeted plan.