Exporters for continuation of concessionary electricity, gas tariffs

KARACHI: Exporters on Friday urged the government to continue concessionary electricity and gas tariffs for the industrial sector in the upcoming textile policy for five years.

Pakistan Hosiery Manufacturers and Exporters Association (PHMA) said electricity at US cents 7.5 per kilowatt hour – all inclusive – and re-gasified liquefied natural gas rates of $6.5 per million metric British thermal unit for textile value chain, including both manufacturers and exporters, should be continued.

This would enable the textile exporters to effectively compete with the regional competitors, according to PHMA.

Ministry of commerce is in process of finalising strategic trade policy framework and textile policy 2020-25. Trade Development Authority of Pakistan (TDAP) is tasked to discuss the action matrices and seek sector-specific suggestions and sector-wise projections for the export of the next five years.

PHMA submitted their proposals to ministry of commerce and TDAP for forthcoming textile policy 2020-25 during an online meeting between representatives of ministry of commerce, TDAP and office bearers.

PHMA Chief Coordinator Jawed Bilwani said the duty drawback of taxes and levies scheme was introduced by the government on exporters demand to redeem their local taxes and levies paid to the government with regards to export consignments. There are no taxes and levies on exports.

“Levies reimbursed to exporters are not an incentive from government but actually the amount paid back to against taxes,” Bilwani said in a statement.

It was demanded that duty drawback of taxes and levies should be provided to garment, home textile and fabric exports at 7, 6 and 5 percent, respectively, under a notification on January 2017. Moreover, an additional 2 percent drawback should be provided, if the exporter achieves an increase of 10 percent or more in exports during current financial year over previous financial year. Furthermore, an additional 2 percent drawback should be allowed for exports to non-traditional markets.

Bilwani said generally big exporters can easily avail long term financing facility on purchase of machinery and

export finance scheme while small exporters find it difficult to complete the bank formalities, which is the main reason that they do not apply for concessionary loans.

The draft of textile policy for 2020-25 is all set to be presented any day before the economic coordination committee for approval. The policy envisages textile exports target at $25.3 billion and $50 billion by 2030.

The textile policy 2014-19 failed to achieve all its targets including doubling value addition from $1 billion per million cotton bales to $2 billion per million cotton bales, increasing textile exports to $26 billion as well as creation of 3 million jobs in five years. The total annual exports reel a little over $21 billion.