“Govt Will Release Major Chunk Out Of Approx. 160 Billion Refund Claims Of Exporters Soon” – Rana Afzal

“Government is well aware of the difficulties of exporters and is taking all possible steps to facilitate them. Value-added apparel sector contributes the largest share in the national exports and deserves government’s highest attention. The exporters are playing imperative role to strengthen the economy and supporting the government to curtail trade deficit. Major chunk out of approx. Rs.160-billion refund claims of exporters shall be cleared which would have positive impact on exports.”

This was stated by the Minister of State for Finance Rana Muhammad Afzal Khan while addressing the exporters of value-added apparel sector in a meeting held at PHMA House, Karachi.

He was of the view that the government should meet the sector-specific associations to learn about their problems and issues rather than relying on 2 or 3 trade bodies which claim themselves to represent the entire business community which is not true. He further added that he will send recommendations to the Commerce & Textile Division to revive the role of value-added textile Associations as previously played by them in previous PM Package Duty Drawback of Taxes scheme whereby the Associations use to verify claims of its member exporters before submission to the Government.

Due to FATF issue, the government could not pay attention to release the refunds as promised on 15^th Feb. However, serious efforts are underway to pay all RPOs in one go.

Rana Afzal acknowledged the contribution of value-added textile sector towards overall exports of the country and said that extension in GSP Plus facility is a big achievement of the Government for which, the Commerce Ministry has done commendable efforts. Besides refunds, the government is also considering to enhance tax slab for existing business & salaried class from existing 4 lacs to 8 lacs and also considering to reduce tax on corporate sector from 30pc to 20pc in order to enhance the tax base. The revenue shortfall shall be covered up by bringing new taxpayers into the tax net. The government will announce an Amnesty Scheme for Overseas Pakistan by mid-March to declare their assets.

“Country have to pay USD 3 billion before June against foreign debts for which, fresh soft borrowings shall be made at lowest possible rates”, he added.

He further said that revenue collection has remarkably increased by 20pc and resultantly, the development portfolio has also increased as provinces are now getting bigger share. We intend to leave behind good foreign exchange reserves so that the caretaker government as well as the new government do not face problem in coming years. The economic indicators have improved and FDI and foreign buyers are also coming to Pakistan. Due to long term measures in the energy sector, the energy price will reduce by 5 cents per unit henceforth will have an impact on cost of doing business. 

He also appreciated the suggestion of PHMA that instead of enacting general law, sector-specific legislation should be preferred.

Earlier, Chairman, Pakistan Apparel Forum and Chief Coordinator PHMA Jawed Bilwani along with Zonal Chairmen PHMA Tariq Munir and Naeem Ahmed welcomed the Minister of State for Finance Rana Muhammad Afzal Khan to PHMA House, Karachi.

In his welcome address to Minister, he apprised that among manifold problems, the liquidity crunch was on the top which was hampering the pace of export efficiency in the wake of stuck up refunds of billions of rupees, which include Sales Tax, DLTL, Customs Rebate, Withholding Tax Claims etc.;

He urged that all Custom Rebate Claims must be released through State Bank of Pakistan at the time of realization and payment of export proceeds. It is essential that the  Government must reduce the highest cost of manufacturing at par with regional competing countries and introduce separate tariff / heads of accounts for textile industry.

He lamented that previously this pro-business claiming government when came to power, exhausted 400 billion refund claims of exporters to pay off circular debts. Bilwani told that he opposed such act at that time but to no avail. Today, the situation is worse than that time as neither refunds have been paid to exporters nor the menace of circular debts has been eliminated. He was of the view that if the government had decided to pay all the refunds instead of circular debts, the situation would be different leading to exports enhancement and employment generation.

He said that during the last 11 years under the textile policies and packages, a total sum of 399 billion rupees were announced out of which, only 52 billion rupees have been released which is only 13pc of the amount pledged by the government. He also demanded to transform zero-rating SRO into an Act to give it permanent legitimate protection.

Nowhere in the world, the government widely publicizes the schemes which they announce for their industries, but in Pakistan. Resultantly, the buyers, knowing everything about the incentive, demands discount, making the scheme ineffective. Bilwani also urged to restore the active role of associations in the PM package DDT scheme.

Gas prices are higher in Punjab as compared with other provinces. Industrial Water Tariff in all cities of Pakistan is around approx. Rs.50/- to Rs.55/- except Karachi wherein Rs.242/- per 1000 gallons which is discrimination. He urged that industrial water tariff for Karachi should also be uniformed like Electricity, Gas, Petrol and Diesel rates. 

The Apparel Export Sector is the backbone and engine of Textile Sector and the largest sub-sector of textile export sector with US $4.67billion exports per annum. From 2008 to 2017 Apparel Sector has shown 54% growth which tantamount to its great export potential. With genuine support and facilitation the Apparel Sector can achieve a milestone in its exports. He termed costly inputs and increasing cost of manufacturing as the major obstacle hampering the export efficiency which needs to be curtailed below the existing tariff in competing countries to achieve a milestone in exports. In this connection, he demanded separate utilities tariff for the export sector.

M/s. Junaid Makda, Khawaja Usman, Rafiq Godil, Arshad Aziz and other leading textile exporters also participated in the meeting.