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Monday May 27, 2024

Budget fails to cheer textile sector

LCCI thumbs up

By Mansoor Ahmad
June 06, 2015
LAHORE: All Pakistan Textile Mills Association (APTMA) termed the budget disappointing while Lahore Chamber of Commerce of Industry (LCCI) and others have termed it ‘growth-oriented’.
Chairman APTMA S M Tanveer said the government has provided nominal relief for new investments and increase in exports. ‘It is squeezing exports of the zero rated sector by collecting non-refundable taxes on many of its inputs including diesel used for power generation, Gas Infrastructure Development Cess and other local taxes, while these taxes are refundable in competing economies,’ he said.
The government has provided incentives on increasing exports by 10 percent to exporters of garments, bed sheets and processed fabric. But the exporters cannot increase exports when they are facing steady decline as is evident from their exports, he added.
Moreover, yarn and grey fabrics have been denied this incentive. Chairman APTMA said Rs64 billion earmarked for textile sector facilitations in next five years come to Rs13 billion/year which is hardly one percent of the textile exports worth Rs1350 billion.
President LCCI Ijaz A. Mumtaz appreciated the Finance Minister Ishaq Dar for accepting a number of demands. He said withdrawal of FBR powers to exempt business from duties/taxes through SRO and loan on zero mark-up for solar tube-wells was a longstanding demand of the LCCI.
‘The cut in mark-up on loans for exporters would encourage the export-oriented industry and it would also put positive impact on the exports,’ he said, adding that Rs.185 billion for road and infrastructure would help economic development of the country. Former Chairman Pakistan Poultry Manufacturers (PPM) association Abdul Basit also appreciated the incentives of up to 10 percent for entrepreneurs on creating new jobs. ‘The permission to export perishable items in Pak rupee to Afghanistan would facilitate exports to the neighbouring country,’ he said.
Former Chairman Pakistan Carpet Manufacturers and Exporters Association (PCMEA) Shahid Hasan Shiekh said decline in interest rates is a good omen for the economy. ‘The incentives announced for agriculture and industry would help economic revival, he said, adding that facilitations granted to construction sector would boost employment particularly among the unemployed and unskilled workforce.
Former Chairman Pakistan Steel Rerolling Mills Association (PSRMA) Mian Mohammad Ashraf said increasing indirect taxes on non-filers through utility bills and other measures would result in theft of power and gas that is still rampant among non filers. He said that government should bring non fillers under the tax net by exerting its writ.
Former Vice President LCCI Aftab Ahmad Vohra expressed dismay that no measures have been introduced in the budget to discourage smuggling and under invoicing. These two menaces are marginalizing genuine importers and domestic manufacturers that pay their due taxes.