Textile millers announce to observe black day

LAHORE: The All Pakistan Textile Mills Association (Aptma) Punjab Chairman Aamir Fayyaz on Friday said the association will observe ‘black day’ throughout the country for the resolution of all issues hitting the viability of the industry.

He said the general body of the association had unanimously decided to observe the black day by closing down their mills. After listing down the issues in a press conference on Friday at the APTMA Punjab office, he demanded withdrawal of four percent customs duty, five percent sales tax on import of cotton, and removal of duties and taxes on MMF import, not being manufactured domestically.

Furthermore, he said the electricity tariff determined by Nepra for 2015-16 should be notified without additions like surcharges/innovative taxes. Electricity tariff should not be higher than Rs8/KWh in any case, he added.

“All ambiguities relating to SRO 491(i) 2016 dated 30 June for no tax/ no refund regime should be addressed and the government should also ensure liquidation of all pending refunds by August 31 to improve liquidity positions of the exporting firms.”

He said 15 percent regulatory duty on imports of all sorts of synthetic yarns entering domestic commerce should also be removed. 

He said the government should also allocate Rs100 billion on an annual basis under the LTFF to encourage new investment initiatives, and also allow indirect exports under LTFF scheme as this would help increase local supply of basic textiles.

He further demanded extension of five percent of DLTL to all textile exports from yarns to garments to overcome incidentals of taxes/levies/cess and various surcharges.

He deplored that the textile and clothing exports had declined by $1.1 billion, ie 7.4 percent in value terms during the fiscal year 2015/16.

“Bangladesh textile and clothing exports increased by eight percent and Vietnam by above 15 percent during the same period,” he added.

Fayyaz said around 70 percent of the textile industry was based in Punjab, facing immense problems with respect to cost of doing business.

He said the cotton production of Pakistan had also declined to just 9.8 million bales, the lowest in 14 years. The Punjab cotton crop has failed badly and dropped by above 40 percent.

During the last three years, Fayyaz said, Pakistan’s textile and clothing exports dropped by $1.4 billion whereas textile exports of Bangladesh up by $3 billion, India $4 billion, and Vietnam by $8 billion.

“Pakistan’s share in global textile trade decreased to 1.5 percent which was 2.3 percent a few years back.

On the other hand India’s share increased to five percent from 3.5 percent, Bangladesh to 3.7 percent from 1.6 percent, and China to 38 percent from 30 percent during the same time period.”

He said despite historic fall in oil prices, the trade deficit has increased further owing to sharp decline in exports and strident increase in imports.

“Pakistan’s borrowing from both local and international institutions has also increased to an alarming level. During last three years the government debt has increased by roughly $48 billion ($35 billion domestic, $13 billion foreign),” he added.

He asked who was going to repay the debt (around 45 percent of the total budget was being consumed by debt servicing), which caused the closure of industry, falling exports, and unemployment.