Relief in sales tax and customs duty hailed

The leather and textile exporters have welcomed the relief in sales tax and customs duty on import of plant and machinery and raw material for industries.
However they did not find any incentive for exporters in the budget announced by Finance minister Shaukat Aziz on Saturday.
The Chairman Pakistan Leather Garment Manufacturers and Exporters Association (PLGMEA), Fawad Ijaz Khan said that the withdrawal of sales tax on the import of raw hide and skin would help in a big boost in export of leather garments. He also welcomed the reduction in sales tax rate on import of chemicals used in manufacturing of leather products.
Fawad Ijaz described the elimination of withholding tax on import of machinery and the requirement of installation certificate from the plant owners as a revolutionary step which would go a long way in development of export oriented industries.
The Chairman Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA), Tahir Aziz welcomed the abolition of sales tax on ginned cotton and said that this would lead to decline in prices of yarn which is a vital raw material for the value added textile sector.
He said that the PRGMEA had demanded reduction of sales tax on local purchases made by exporters from 15 percent to 10 percent which would have added to the competitive edge of textile exporters in the post quota free period beginning from January 2005.
Tahir Aziz said that a basic demand of garment exporters about elimination of withholding tax on import of plant and machinery by the commercial importers had been accepted in the new budget.
The Chairman of Karachi Chamber of Commerce and Industry (KCCI) sub committee on Export, Iqbal Mangrani has welcomed the complete payment of sales tax refund to exporters which was earlier allowed in two instalments saying that nothing has been announced for simplifying the complex system of processing of sales tax refund which results in great payment delays. He however welcomed the income tax relief provided to companies and individuals.
Iqbal Mangrani said the federal budget lacked any incentives for the export-oriented industries, which were essential in order to support exporters in the WTO regime.
He welcomed the 10 percent cut in duty on import of raw material except polyester staple fiber, which is a basic raw material for the textile sector. The Finance Minister did not announce any relief for the textile exporters suffering from the undue protection provided to the ICI's PTA plant.