Finance Ministry refuses to release EDF worth Rs28bln

LAHORE: The Finance Ministry has refused to release Rs28 billion of the Export Development Fund (EDF) to the Commerce Ministry, Trade Development Authority of Pakistan (TDAP) Chairman SM Munir said on Wednesday.
He was addressing the business community at the Lahore Chamber of Commerce and Industry (LCCI).
Muneer said the TDAP was doing its best to boost exports and has identified the bottlenecks faced by the exporting sectors. Exports were declining worldwide, but prudent governments facilitated their exporters through concessions and even subsidies. Whereas here, the planners denied the exporters their due rights and kept power rates high.
He said as the largest leather exporter of the country his own firm experienced an export decline of about 50 percent in value, although in terms of quantity the exports are at the same level as last year. Carpet exporters were facing the same dilemma of lower per unit value as the major countries of the world face recession.
Apart from recession, Muneer called on the government to give attention to some domestic factors affecting the exports as well. Firstly, the federal board of revenue is sitting on genuine refunds of exporters worth Rs225 billion. These refunds he regretted are shown in books to the International Monitory Fund (IMF) as taxes. He said small exporters have seen most of their capital blocked in refunds, forcing them to reduce export activities.
The TDAP chairman said the federal finance minister runs from pillar to post for arranging foreign loans of $1-5 billion per year. “As TDAP head I asked the authorities to pay all our due refunds and exporters will refund the same amount to the government in shape of equivalent dollars. Refunds should be made in one go as was done in case of clearance of IPPs’ dues in June 2013.
The refunds should be cleared even if the government has to print notes,” he asserted.
Munir said as trade regulator and facilitator of the country, the TDAP has written numerous letters to the FBR in this regard. He regretted that not a single letter received a reply. This in fact was the way bureaucracy operates in Pakistan.
He said when he assumed charge of the TDAP; the letters from the exporters were similarly neglected and thrown in the waste basket. Now, he added all letters were not only acknowledged by the authority, but suitable replies were given within 1-3 days. He hoped that the new Federal Board of Revenue head would introduce this culture in his institution as well.
Lamenting the high power rates as a factor in declining exports, he said against average power rate of 15 cents in Pakistan the electricity was supplied to industries in India at nine cents.
He said gas supplies in Punjab were nominal. The government has lowered refinance rates for the textile sector only. This facility should be provided to all five major exporting sectors.
The TDAP chief conceded that the rent charged for one exhibition hall in Karachi expo centre was Rs400,000 while the rent of similar exhibition hall in Lahore expo centre was Rs1.2 billion.
However, he pointed out that TDAP was helpless in this regard because the expo halls were leased for 99 years to the party that could charge its own rates. He said despite such high rental, both the exhibition halls at Lahore expo centre were booked in advance for one year.
Regarding complaints of the exporters for not providing them space in international fairs where TDAP buys staff space, Munir said that booking for stalls is done four months before the start of the exhibition. He said if some exhibitors drop at the last moment, the stall charges are not refunded.
He advised exporters to inform TDAP about their intent six months prior to the exhibition.
“For the past six months I have been trying in vain to get an appointment with the prime minister to apprise him of the problems faced by exporters. I feel ashamed that a resourceful country like Pakistan is hardly exporting goods and services worth $24 billion,” Muneer said, adding a prudent approach could double the exports in three years.
He said decision making on trade matters should be very fast. He said the day Pakistan got GSP Plus status from the European Union, the Indian government announced export concessions equivalent to the reduced duty benefit available to Pakistani exporters.