Budget lacks incentives: PLGMEA

KARACHI: Pakistan Leather Garments Manufactures and Exporters Association (PLGMEA) has criticised the federal budget 2018/19, and said there are no incentives to stimulate and boost industrial growth.

PLGMEA Chairman Hassan Ali Bhatti in a statement on Thursday called the budget meaningless for the business community, and said the timeframe announced in the budget for refund claims was not only disappointing, but also not acceptable.

The value-added leather exporters were already burdened and crushed due to rising tariffs of electricity, gas and other essential raw materials, leading to high cost of doing business in Pakistan as compared to competing countries. “Huge amount of the harassed exporters’ liquidity is blocked in sales tax refund claims, Customs rebate claims and in DLTL claims,” he said.

“The government for the last five to six months has stopped paying refunds amounting to billions of rupees belonging to the export sector,” he added.

Holding back refunds for a further period of one year will cripple export commitments and ultimately exports will decline, Bhatti said, and demanded the government to immediately release the refund claims. Bhatti appreciated the “No payment no refund regime” of the government. “This practice should continue in the future too,” he suggested.

Zero rating is supportive to eliminate tax frauds once and for all, as the system of collecting sales tax and then refund is not only an exercise in futility, but involved a large number of sales tax personnel and precious time of the Federal Board of Revenue (FBR), which can otherwise be utilised to bring more and more people in the tax net to increase revenue.