Textile industrialists, exporters warn against double taxation

RECORDER REPORT

FAISALABAD: Industrialists and textile exporters have warned that if zero rated declared 'textile exports' were further burdened by double taxation, and refunds are not paid in time, the whole textile industry would become 'sick industry', which is a major job providing sector of the country.

Talking to newsmen, Salamat Ali, chief coordinator and former chairman of Pakistan Hosiery Manufacturers and Exporters Association (North Zone), said that the value added textile industry is facing worst ever crisis due to 170 days' gas shedding during 2011, load shedding of electricity, continuously increasing tariff of energy plus petroleum and price hike of inputs, while fresh investment in Punjab has almost stopped.

Doing business is not in favour of the textile industry. Resultantly, exporters are losing their strike power for exports, he added.

He said that the government had declared the textile exports as zero rated, but taxation and refund matters created problems. Trade Development Authority of Pakistan is collecting 0.25 percent export development fund and nobody knows about its expenditure or clean audit reports.

He said that Textile Ministry has proposed another one percent cess on textile industry @ annual turnover export income under 'Textile Industry Development Promotion and Standards Act 2011', which will be collected from manufacturers, dealers and other allied concerns. Proposed levy of cess on textile would be tantamount to double taxation--one percent withholding tax on turnover and one percent cess on turnover.

He said that this proposed 'act' is an attempt of over-regulation, duplication, anti-export and severe financial burden on value-added and export-oriented textile industry.

Salamat strongly opposed this double taxation plan and demanded that the government should remove the hurdles on way to textile exports on priority basis to pull out the national economy from multiple crisis. This is the only way to end the poverty and unemployment in the country, he added.

He urged the government to immediately shelve the proposed 'Industry Closure Plan' to avert industrial closures and resultant massive layoffs. "How can the industry afford to pay the all-time high mark up of 16-18 percent when there is no gas for the industry for 90 days at a stretch in winter plus continuously load-shedding of electricity?"

He said that around 40 percent industrial units in Punjab run on gas and gas suspension means no production by almost half of the industry and a loss of millions of rupees to the exchequer.