KARACHI, Dec 23: Millions of rupees in duty drawback and sales tax refund are stuck up with customs and sales tax collectorates since last several months, exporters complain.
It is claimed that no payment of duty drawback from the Karachi collectorate has been made since last one month. Similarly, sales tax refunds to exporters are also not being paid the FBR.
The exporters, already faced with recession, complain that if their genuine funds are blocked they would be left with no choice but to close their units or resort to large scale layoffs.
According to chairman Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea) Fawad Ijaz huge funds towards duty drawback and sales tax refunds are held back by the authorities.
He disclosed that the exporters of leather goods from Sialkot and Gujranwala had not received sales tax refunds since last three months and this has created liquidity crunch at a time when the global recession is having its toll on exports of leather goods.
Mr Khan alleged that the exporters’ funds were being held back by the government in order to boost the Federal Board of Revenue (FBR) revenue collections.
He said that due to global recession retail sales of leather garments in Europe and North America were about 30 per cent down as compared to last year, therefore, leather garment exporters are not receiving repeat orders from their customers.
The leather garment exports, which showed four per cent growth in July-Oct 2008 over same months last year, sharply declined during Nov 2008 by 35 per cent over last year.
Dawood Usman Jakhura, chairman Pakistan Readymade Garment Manufacturers and Exporters Association (Prgmea) said that whereas other countries were preparing themselves to face the worst scenario of the recession expected next year, “our policy makers are sleeping”.
He said China and India had raised tax rebates on certain exports to help producers cope up with smaller profit margins as a result of slacking market demand and rising produ-
ction costs.
Mr Jakhura said that China had revised tax rebate on textile and garments to 14 per cent from 13 per cent. Earlier, he said it was increased from 11 per cent to 13 per cent.
He disclosed that a study carried out by National Council of Textile Organisations (NTCO), Chinese exporters have seen export subsidies from the government increase from $19 billion to $29 billion.
On the contrary, Prgmea chief said in Pakistan in order to beef up their collection figures the revenue collecting authorities are holding back funds of export trade, which is extremely damaging at this juncture when the entire global market is under the grip of recession.
Pakistan Bedwear Exporters Association (PBEA) Shabir Ahmed said that the exports were declining owing to falling sales in Europe and North America of all categories of textile goods.
He urged upon the policymakers to focus on issues related to exports because the country badly needs foreign exchange and equally it also needs jobs for its youth.