Tanners propose budgetary measures to save industry

LAHORE: The Pakistan Tanners Association (PTA) has urged the government to abolish customs duty on the import of basic raw materials in the upcoming federal budget 2017/18, a statement said on Tuesday. 

“The government should allow duty-free import of raw and wet-blue hides/skins, all tanning machineries, accessories, particularly the stamping foils used by the industry for upgradation of leather, which is in great demand in Europe,” Azam Malik, PTA regional chairman, demanded in the budget proposals. 

“We also recommend that the government should continue the sales tax zero-rating facility to the export-oriented leather industry in true letter and spirit with all inputs to be zero-rated including packing materials, fuels, and spares etc in the budget.” 

Moving forward, Malik demanded of the government to expedite the disbursement of drawbacks under the Prime Minister’s Rs180 billion export incentives package. 

“The PTA also wants a level-playing field for local exporters in world markets as the country’s exports are on a constant decline,” he said adding, the high value-added leather sector provides millions of jobs to skilled and unskilled workers. 

He said the PTA, in its budget proposals, has also demanded the inclusion of remaining eight HS Codes for Finished Tanned Leather in SRO 62(I)/2017 as exports are eligible for 5 percent drawback of local taxes and levies. 

“The Collectorate of Customs (Preventive) Lahore should be designated as Export Collectorate for smooth and efficient processing of duty drawback claims and there should be a system to allocate separate funds for duty drawback payments rather than linking this with revenue generation of unrealistic targets,” he said.  

Malik added that despite installation of expensive online web based clearing
systems, exporters’ money is being held up in the system under the pretext of ‘meeting the so-called revenue targets.’ 

“The Pakistan Tanners Association has tried but failed to convince the concerned collectors that chasing un-realistic revenue targets has disabled them to release duty drawback claims for which no authority in Federal Board of Revenue (FBR) is holding them responsible,” said he. 

He stated that presently, an amount of over Rs300 million is lying with Collectorate of Customs (Preventive) Lahore on account of duty drawback payables against air-lifted consignments of leather from Lahore airport for the past one year.

“It is suggested that the chairman of the PTA should be included on the Export Development Fund (EDF) so that the mother industry could play vital a role in the deliberation and decisions for the promotion of exports,” Malik said. 

He said that livestock population in Pakistan is depleting very fast due to smuggling and excessive slaughtering for meat export to Middle East.

“The situation is alarming and needs immediate attention of the government. The shortage requires fresh investment and incentives and can also be compensated partially through imported raw material,” the Pakistan Tanners Association chairman said. 

Going forward, Malik observed that it was unfortunate that none of the relevant ministries bothered to approach the industry for taking any preventive measures to stop the freefall of leather exports, despite GSP Plus status by the European Union (EU). 

“The most of the promises made for supporting leather sector remain unfulfilled as the policies were announced but never implemented,” the PTA regional chief said expressing his concerns. 

He said the PTA appeals to the PM to intervene and save high value-added export oriented industry. 

“The government should also honour its pledge to clear pending tax refunds of exporters, without any delay,” he said and added that it was a matter of concern that despite GSP Plus window, exports are falling sharply. 

Malik emphasised the government should adopt pro-export policies and ensure their effective implementation so that country could continue its journey to development and prosperity.