KARACHI: Pakistan Yarn Merchants Association (PYMA), while rejecting the Economic Coordination Committee (ECC) decision to impose 5 percent regulatory duty on polyester filament yarn, the primary raw material of textile industry, has termed that move as destruction of 8 lakh power-looms which were the lifeline of textile industry.
Senior Vice Chairman Sohail Nisar, Vice Chairman Javed Khanani, FPCCI Former President Nasir Hayat Magoon, Mohammad Usman, Saqib Goodluck, Khurshid Sheikh, Aslam Moten, Hanif Lakhany, Farhan Ashrafi, Danish Hanif, Saqib Naseem, Adnan Riaz, Khurram Bharara, Junaid Teli and other Managing Committee members strongly protested against the ECC decision to impose RD on yarn
Speaking to media at Karachi Press Club on Saturday, they appealed to Prime Minister Shahbaz Sharif and Finance Minister Senator Ishaq Dar to suspend the ECC decision to save the SMEs sector of Pakistan from destruction.
“The government must issue directives not to impose RD on yarn in the best economic interests of the country. Otherwise, SMEs will be shut down and millions of workers will be rendered jobless,” they maintained.
PYMA leaders pointed out that there is already 11 percent customs duty on polyester filament yarn, and with 5% RD, the duty will be 16 percent while fabric is also subject to 16 percent duty. As a result of the imposition of RD, 8 lakh power-looms will be locked and millions of workers will be unemployed, pushing around 2 million households into poverty.
PYMA leaders questioned the government why to benefit only two producers so as to destroy Small & Medium Enterprises (SMEs), especially power-looms which are associated with the textile industry. Although these two producers meet barely 25 percent of the industry’s demand as they are not manufacturing other items.
PYMA leaders warned that they will continue their protest against the ECC’s RD levy on yarn until the decision is withdrawn. PYMA along with power-loom owners of Karachi, Hyderabad, Tando Adam, Lahore, Multan, Faisalabad and Pakistan Art Silk Factories of Gujranwala were also protesting.
“The National Tariff Commission (NTC) sent its recommendations without any consultation with the stakeholders which was unfair. The NTC must listen to us and any decision must be taken in consultation with stakeholders,” they added.
They mentioned to mediapersons that 11 percent customs duty was imposed on the import of polyester filament yarn, which will increase to 16 percent after 5 percent RD. Yarn was subject to income tax, sales tax, additional sales tax and even anti-dumping. If all taxes were combined, 50 to 55 percent taxes were paid at import stage of yarn, yet the imported raw material was cheaper than both local two producers’ varieties. From which angle, monopolies and excessive profiteering of the producers can be estimated, the questioned.
PYMA leaders pointed out, “Although local producers make only 25 percent of the total demand of polyester filament yarn, the textile industry has to depend on 75 percent of imported yarn. They further said that in the presence of ongoing inflation, high electricity & gas tariffs, labour issues, if more tax burden was imposed on industries, unemployment will increase and the government will have to pay many times more for 5 percent RD.”
PYMA leaders appealed to Prime Minister Shahbaz Sharif and Finance Minister Senator Ishaq Dar to maintain the current duty structure on yarn and requested them to ask the ECC to avoid imposing RD.
“Instead of measures to ‘destroy’ economic activities, such policies should be formulated which could promote business and industrial activities and create ample employment opportunities.”
Copyright Business Recorder, 2022
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