KARACHI: Pakistan Yarn Merchants Association on Saturday rejected Economic Coordination Committee’s decision to impose 5 percent regulatory duty on polyester filament yarn.Terming the...
KARACHI: Pakistan Yarn Merchants Association (PYMA) on Saturday rejected Economic Coordination Committee’s (ECC) decision to impose 5 percent regulatory duty (RD) on polyester filament yarn.
Terming the imposition of RD a disaster for the 800,000 power looms, PYMA Senior Vice Chairman Sohail Nisar, Vice Chairman Javed Khanani and others strongly protested against the ECC's decision.
They urged the government to reconsider the decision and not to impose RD on yarn, a major raw material for the textile industry, as it would be in the best interest of the entire country. They also said that the government should consider the impact this decision would have on small and medium enterprises, which employ millions of workforce.
PYMA leaders pointed out that there was already 11 percent custom duty on polyester filament yarn, so with 5 percent RD, the duty would be 16 percent, while fabric was also subject to 16 percent duty.
As a result of the imposition of RD, 800,000 power looms would be shut down, and millions of workers laid off. This, they said would push a minimum of 2 million households into poverty.
PYMA leaders also questioned the intentions of the government, as the decision would benefit only two producers at the cost of SMEs. These two producers barely meet 25 percent of the industry's demand, and were not manufacturing other items.
PYMA leaders warned that they would continue their protest against the ECC’s imposition of 5 percent RD on yarn until the decision was withdrawn.
PYMA has been protesting along with power loom owners of Karachi, Hyderabad, Tando Adam, Lahore, Multan, Faisalabad and Pakistan Art Silk Factories of Gujranwala.
Criticising the National Tariff Commission (NTC), the PYMA said that the NTC sent its recommendations to the ECC without any consultation with the stakeholders, which was unfair. “NTC must listen to us and any decision must be taken in consultation with stakeholders,” they added.
Yarn was subject to income tax, sales tax, additional sales tax and even anti-dumping. If all taxes were combined, 50 to 55 percent taxes were paid on import stage for yarn, yet the imported raw material was cheaper than the one produced by the two local producers.
In the presence of ongoing inflation, high electricity and gas tariffs, and labour issues, more tax burden on industries would create unemployment.
PYMA appealed to Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar to maintain the current duty structure on yarn and requested them to ask the ECC to avoid imposing regulatory duty on yarn.
The government should focus on creating an environment conducive for business, instead of taking measures that destroy economic activities, the association said.