ISLAMABAD: The commerce ministry has formed a special committee to assess proposals from exporters amidst opposition parties’ rejection of the government’s proposed tax measures.
Ahead of the passage of the Finance Bill 2024 in the parliament, Commerce Minister Jam Kamal Khan held a meeting on Monday to address concerns raised by the All Export Association of Pakistan. The National Assembly will likely approve the finance bill in the next few days.
The committee will present its recommendations to the finance minister. However, it is unclear if these recommendations will be submitted prior to or following the approval of the Finance Bill 2024.
An official announcement of the commerce ministry said the meeting was convened on Prime Minister Shehbaz Sharif’s directions to address concerns about the federal budget among exporters and other business communities.
In the budget 2024-25, the government has changed the tax regime for exporters from 1pc Final Tax Regime (FTR) to staggering Minimum Tax Regime (MTR). In addition to 1pc income tax, exporters also pay 0.25pc Export Development Fund and this cost increase cannot be transferred to foreign buyers.
Pakistan Textile Exporters Association Patron-in-Chief Khurram Mukhtar said that with such moves, the government has defeated its own principle of export-led growth by exponentially increasing the cost for the export sector.
He pointed out that the highest growth-oriented textile industry is facing an acute shortage of finances as a significant portion of exporters’ working capital, approx. Rs700 billion, is stuck in the refund regime, resulting in the burden of paying 24pc interest on outstanding refunds.
Published in Dawn, June 25th, 2024
