ISLAMABAD: In a major development, the government has doled out in a big way to the exporters the refunds amounting to Rs35 billion relating to duty drawback schemes giving a clear message to exporters that the government stands with the business community to place the country on way to high trajectory exports growth.
Such a major step has never been taken before in history of Pakistan to pay the mammoth amount of Rs35 billion refunds to the exports in one go.
“This shows how the economic team members of the sitting government are sensitive to the problems of the business community and are determined to provide relief to the business community not only to increase economic activities in the country, but also to jack up exports,’’ Dr Khaqan Najeeb, Adviser on Finance Division, told The news while confirming the development.
“We cleared all the verified claims of refunds amounting to Rs35 billion pertaining to duty drawback schemes on May 31, 2019.” Dr Najeeb said, adding that the government has made a record cash payment of Rs50 billion in toto during FY-2019 to exporters under the duty drawback scheme. This is under various export enhancement schemes of textile and commerce divisions, including the prime minister's export package.
Dr Najeeb further said that Rs24 billion was initially allocated for these payments in FY-2019. However, in order to resolve the liquidity problems of exporters and to sustain export momentum, the government provided an extra Rs26 billion through supplementary grant in June, 2019 to clear all claims. “This historic effort by the government will pave the way for increasing exports to earn the much need foreign exchange,” Dr Najeeb added.
The country has entered in new regime by doing away with the SRO 1125 (zero-rating) and the government will now from onward to ensure the refunds payment smoothly to the exporters to avoid any kind of liquidity crisis, the exporters been have facing since long.
He said that exports of the country have increased in quantitative terms in last few months and in the time to come the exports will further surge as the export industry of textile, carpet, leather, sports and surgical has been extended the provision of gas at $6.5 per mmbtu and electricity at 7.5 cents per unit to keep their input cost at par with the input cost of competing economies in the region. However, he showed inability to provide any data showing the average disbursement of refunds per exporter saying this king of working he doesn’t possess.
Zubair Motiwala, Pakistan’s eminent exporter and Co-President PAJCCI, when contacted, confirmed that the government has paid Rs35 billion to the exporters. He said it is a commendable step by the government.
He said that there were claims of Rs82 billion out of which Rs35 billion has been paid. Motiwala said that business community is really thankful to Adviser to Prime Minister on Finance, Revenue and Economic Affairs Dr Hafeez Shaikh and FBR Chairman Shabbar Zaidi. He said this will help erase the liquidity crisis of the exporters. He said that the government has also issued three years bonds to exporters against the refunds to en-cash them from the banks on discount which is also helping to resolve liquidity crisis. He also praised the government for initiating raids on Bara markets and tighten the borders saying it will help curb the presence of the smuggled goods in Pakistan’s markets and this is how the local markets will be flooded with Pakistani goods not with the smuggled ones.
The FPCCI Senior Vice President Dr Ikhtiar Baig also lauded the government initiative, saying it will provide ease to the exporters. He said that the refunds accumulation with the government increased in the PML-N government as the then economic managers were not used to pay the refunds to the exporters as they made them the part of revenue and show that they have chased the revenue target. However, in the PPP rule, there was no refunds issue.