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April 30, 2015

Aptma assured of textile issues resolution


April 30, 2015

LAHORE: Federal Secretary Textile has assured the textile association that he will take up textile issues with relevant quarters in order to boost textile exports, a statement said on Wednesday.
Central Chairman All Pakistan Textile Mills Association (APTMA) S M Tanveer, in a meeting with the Federal secretary textile Amir Khan Marwat, said keeping in view the alarming drop of 16 percent in textile exports during the March, a task force has been constituted on sustainability of the industry and to suggest a way forward.
The task force is going to suggest the government on measures to increase exports i.e. reduce the cost of doing business or bring the rupee at the real value.
The industry is no more feasible on account of various disadvantages against regional competitors, he said, adding that the innovative taxes being charged from various sub-sectors of the industry are not zero rated against exports, causing multiplier effect on the final products. Therefore, the textile exports are becoming uncompetitive in the international market.
Chairman APTMA said the textile industry exports in Pakistan are burdened with multiple local, provincial and federal taxes besides the system inefficiencies.
These are further overburdened by the turnover taxes, including one percent sales tax, transportation cost for material and end products for exporting, i.e. 32 percent tax on diesel, six percent EOBI tax on wages, 0.25 percent Export Development Surcharge (EDS) tax, six percent social security on wages, cotton tax (Rs 50/bale), stamp duty of one percent sale of power cost, textile tax of Rs one/spindle, opportunity cost of outstanding refunds like sales tax, income tax and duty drawbacks, professional tax, protective duty on polyester, spares and chemicals, surcharges and levies on energy i.e. Neelum Jehlum Surcharge, Equivalent Surcharge, debt surcharge and additional surcharges.
Chairman APTMA said these multiple taxes and system inefficiencies have

burdened the spinning industry by 4.99 percent of sales, weaving industry by 4.20 percent of sales and processing industry by 7.22 percent of sales. The textile value chain in Pakistan is disintegrated and consequently the multiplier effect of the chain is around 15 percent of the sales.
He urged the federal textile secretary to ensure removal of these multiple taxes and other inefficiencies from the industry in the upcoming budget or provide drawbacks against exports proceeded by the State Bank of Pakistan (SBP).

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