Tax abolition on cotton import urged

KARACHI: Opposing customs duty and other levies on import of raw cotton, the Karachi Cotton Association on Friday said the country needed at least four million bales due to the shortage of the commodity.

KCA Secretary Aftab Alam expressed concerns over the decision of the government to impose three percent customs duty, two percent additional customs duty, five percent sales tax, and one percent income tax on import of raw cotton with a view to encourage use of the local cotton crop.

He said the government should realise that due to anticipated decline in cotton production in 2018-19, there is a gap of minimum four million bales in cotton production and mills’ consumption.

Alam said owing to severe water shortage during cultivation period and usual factors of reduction in yield per acre, cultivation of sugarcane in the areas earmarked for cotton cultivation, and supply of uncertified cotton seed, etc, there was a dearth of raw cotton in the local market.

The cotton association secretary said local textile industry was compelled to import raw cotton to meet its requirement of raw material, and to ensure its contribution towards achieving the target of exports fixed by the government.

“After payment of such heavy duties and taxes imposed on import of cotton, the cost of the raw material of the textile industry, which is imported cotton, will be increased due to which the local textile industry will become unable to compete in the international market,” he added.