LAHORE: Leather exports have posted consecutive decline during the first seven months of the fiscal year 2016-17 at 7.5 percent, a statement issued by the Pakistan Tanners Association (PTA) said on Monday.
Quoting the PTA chairman Anjum Zafar, the statement added that the leather export sector earned $194.779 million as compared to $210.577 million during the corresponding period last fiscal.
In July-June 2015-16 the exports were $362.753 million as compared to $489.412 million recorded during the same period in 2014-15, registering a drop of 25.88 percent. “Thus, the total reduction in exports in 19 months has reached 33.38 percent,” the statement said.
“This declining trend is not being halted as our cost of doing business is the highest in the region and government has not been following export-led policies as compared to regional countries,” the statement added.
The prime minister’s incentive package announced on January 10, 2017 was too late and moreover was totally ineffective due to missing out all the relevant HS codes in the recent SRO issued by the ministry of commerce, the PTA chairman said.
“Due to this serious omission, almost 95 percent of manufacturers are not able to avail this package. Three weeks have lapsed since the SRO’s announcement, but despite of repeated reminders to the commerce ministry, it has not been rectified, due to which the industry is highly discouraged,” Zafar said.
The PTA chairman said the leather industry, especially from Lahore and northern collectorates, has around Rs300 million blocked in rebates for the past two years. He said the Ministry of Finance focused on collecting an unrealistic revenue target instead of paying the export rebates. “The sales tax refunds are not paid from last April 16 as well, where also huge funds are blocked.” About 40 percent industry has already closed down and the rest are on the verge of closing down, he added.
Zafar demanded including the remaining HS Codes in the concerned SRO, prompt release of duty drawback and sales tax refund claims to PTA member exporters, and early notification for 75 percent lab testing already approved by the federal commerce minister to the industry, to save the leather industry from further collapse.