Leather industry needs government attention, says PTA chairman

Chairman, Pakistan Tanners' Association (PTA), Anjum Zafar has expressed concern over continued decline of leather exports since first seven months of the current financial year 2016-17. He noted that from July 2016 to January 2017, exports stood at US$ 194.779 million as compared to the corresponding period during last financial year 2015-16 that was US$ 210.577 million that showed a decline by about 7.5%.
He said that total export during the last financial year (July 2015 to June 2016) remained US$ 362.753 million as compared to US$ 489.412 million during July 2014 to June 2015 that showed a drop in exports by 25.88 %. The total decline of 19 months is about 33.38% in toto.
"This declining trend is not being halted because the cost of doing business in Pakistan remains the highest as compared to other countries in the region," he said, adding the government has not been following export-led policies as compared to regional countries' governments.
Anjum Zafar further said that the Prime Minister's incentive package that was announced on the 10th January 2017 was too late and totally ineffective and unproductive because all major relevant HS codes were missed in the recent SRO 62 (1)/2017 dated 02.02.2107 issued by the ministry of commerce. He said that due to this serious omission, almost 95% of manufacturers were not able to avail this package yet. "Three weeks have lapsed since announcement of the SRO but this has not been rectified despite repeated reminders to the ministry of commerce due to which industry is highly discouraged," he said.
Anjum further revealed that leather industry's huge funds were blocked in rebates and specially from Lahore and north collectorates over rupees 300 million have not been paid for two years because the finance ministry provided less funds as their focus is to make collection to meet unrealistic revenue targets hence they ignore payment of export rebates don't provide funds in this regard owing to which they seem to be helpless and industry keep suffering.
"Moreover, the sales tax refunds are not paid from April 16, 2016 alongside the blockade of huge funds, he said, adding that with these unfriendly and non-export policies, it is not possible to revive the industry exports. He said that they cannot retain the lost markets. He said that about 40% industry has already closed down and rest are on the verge of closing down and are hardly surviving with lower production levels.
The PTA chairman said that recently federal commerce minister announced 75% subsidy on mandatory lab tests for exports to international brands from international laboratories made by him. He announced so during inaugural function of the 3rd PMLS 2017 on January 28, 2017 in Lahore but that has not yet been fulfilled/ notified for leather industry despite PTA's various detailed presentation/letters sent in the wake of his announcement.
He said that the livestock population in Pakistan is depleting rapidly which has fallen below to the figures of 2006 but that is the dire need of the industry. He said it was the fundamental of raw materials for necessary value addition of finished leather, leather footwear, and leather garments/products.
"The leather sector of Pakistan as the 2nd biggest export-oriented industry of the country is now dying which can be saved by the federal government," he said urging the rulers to act on above for the removal of major grievances. He urged that government must urgently include remaining H.S. Codes in the concerned SRO No 62 (I)/2017 dated 02.02.2017, promptly release Duty drawback and Sales Tax refund claims to the PTA member exporters and notify the announced 75% subsidy on lab testing immediately, to save this precious and important Industry from further collapse.
Anjum Zafar urged the Prime Minister Nawaz Sharif, Finance Minister Ishaq Dar and Commerce Minister Khurram Dastgir Khan for early removal of the problems of the industry, so that 95% PTA member exporters may also able to avail the incentive of 5% drawback of local taxes. He said this and another special relief package for leather sector would make them able to compete in the international markets.