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PLGMEA urges government to withdraw EDS

Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) demanded immediate stoppage of 0.25 percent Export Development Surcharge (EDS) collection on export proceeds. Fawad Ijaz Khan PLGMEA Patron-in-Chief said that EDS is being levied on almost all exports except defence exports and the government supplies since 1999.

The Export Development Funds Act was amended in 2005 according to which it was made obligatory for the Finance Division to transfer entire amount of EDS collected in the preceding year to the Ministry of Commerce on 1st of July of next fiscal year.

He said that since the implementation of the Act from 2006-07 the Ministry of Finance transfers every year a very negligible amount to the Ministry of Commerce as compared to the yearly collection of EDS.

The payable amount by the Ministry of Finance as of today stands at around Rs 25 billion. The EDS collection during 2013-14 was around Rs 6 billion whereas the Ministry of Finance only disbursed Rs 1 billion. For the last five to six years, various attempts were made by the Ministry of Commerce to get their due funds from the Ministry of Finance.

The proposal was made by the exporters through the EDF that the funds collected under EDS should be paid in a separate account of EDF to be maintained by the Ministry of Commerce rather than going into the government treasury. This proposal put forward by the Ministry of Commerce was agreed in principle by the former Prime Minister but unfortunately it is still not implemented, he informed.

The Funds collected under EDS are disbursed for different export promotion projects by the Export Development Fund Board which is chaired by the Minister of Commerce. For last two to three years different export promotion projects are approved by the EDF Board but unfortunately funding for these projects is not available. "Till the last meeting of EDF Export Promotion Projects worth over Rs 3 billion were approved but funding was not available with the Ministry of Commerce. Therefore, we demanded that the government should immediately stop the levy of 0.25 percent EDS on exports till such time the Ministry of Finance pays Rs 25 billion to the Ministry of Commerce", he said.

He suggested that the EDF Board should continue to approve good Exports Promotion Projects for further amount of Rs 22 billion (Rs 25 billion payable by the Ministry of Finance minus Rs 3 billion projects already approved by EDF). He has strongly criticised the attitude of the Ministry of Finance towards the development of exports from Pakistan. It seems that the export sector is not the priority for the government. The exporters are not getting back their own money which they have paid through EDS and the government is using the exporters' money for funding its other activities.-PR

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