FPCCI urges govt to abolish 2.5pc regulatory duty on PFY

KARACHI: "Government should reverse its decision to impose a 2.5pc regulatory duty on polyester filament yarn and impose uniform import duties & taxes for commercial & industrial importers, so that industries especially SMEs can get cheaper raw materials and to boost domestic exports", Khawar Noorani, Chairman Standing committee on imports, convener yarn trade committee, Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and former chairman Pakistan Yarn Merchants Association( PYMA) demanded.

He expressed serious concerns over the government's move to protect local manufacturers of polyester filament yarn for the last 30 years and destroy the yarn import sector and appealed Abdul Razzaq Dawood, advisor to the Prime Minister on commerce & investment to eliminate the monopoly of local manufacturers and provide level playing field. He also requested for imposing uniform duties & taxes for commercial & industrial importers at the import stage. In an online meeting of the FPCCI Standing Committee with Importers, unanimous recommendations were made. Khawar Noorani requested Abdul Razzaq Dawood to play a role for reducing import duties & taxes on polyester filament yarn (PFY) and allow import without sales tax, advance value added sales tax & advance income tax. He said that anti-dumping duty on PFY should also be suspended until local industries meet the demand of local factories.

He further said that the basic raw material of textile industry and SMEs is polyester filament yarn (5402.4700, 5402.3300) with additional customs duty, regulatory duty, anti-dumping duty, advance sales tax, advance withholding sales tax 3pc, advance withholding Income Tax 2pc, higher customs valuation rulings, while anti-dumping duty has already imposed to support local manufacturers of PFY is subject to 2pc duty, income tax & 17pc sales tax, which constitute a total of 45pc tax on raw materials. Imposing an additional regulatory duty of 2.5pc will increase smuggling and destroy local industries he added.

"Local manufacturers unable to fulfil raw material demands and can barely meet the demand of 20 to 25pc of polyester filament yarn while the rest is met by imports and commercial importers supply raw materials to small factories, so if SMEs continued to get expensive raw materials, most of the factories will shut down, which would have a negative impact on the country's exports and increase unemployment", he feared.

Khawar Noorani pointed out that due to COVID-19 pandemic and lockdown, the commercial importers have to invest too much amount than give their goods to end users on credit basis, in past few months they are not getting even their old payments from the manufacturers, but commercial importers are still playing an effective role in continuing the production activities in the best economic interest of the country, regardless of their losses.

Copyright Business Recorder, 2020