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KARACHI: Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has submitted their proposals to Ministry of Commerce and Trade Development Authority of Pakistan (TDAP) for forthcoming Textile Policy 2020-25.

Ministry of Commerce is in process of finalizing Strategic Trade policy Framework and Textile Policy 2020-25 for which TDAP has been tasked to discuss the action matrices and seek sector-specific suggestions and sector-wise projections for the export of the next five years. To discuss the PHMA proposal, online meeting on Zoom between representatives of ministry of commerce, TDAP and office bearers of PHMA was held yesterday wherein chief coordinator and former central chairman PHMA Muhammad Jawed Bilwani presented proposals.

PHMA has proposed that to enable the textile exporters to effectively compete with the regional competitors, electricity at US Cents 7.5/KwH - all inclusive and RLNG rates of $6.5 per MMBTU for textile value chain including both manufacturers and exporters should be continued. Rates should be reviewed on annual basis and if rates in the regional competing countries are reduced, the rates should also be brought at par or below utilities tariff prevailing in the regional competing countries. If RLNG rates are reduced internationally from $ 6.5 per MMBTU, then this benefit should be provided to textile value chain including both manufacturers and exporters.

Commenting on the duty drawback of taxes and levies, he stated that the said scheme was introduced by the government on exporters demand to redeem their local taxes & levies paid to the Government with regards to export consignments as there are no taxes and levies on exports. DDT and DLTL being reimbursed to exporters is not an incentive from government but actually the amount paid back to against taxes.

It is proposed that Duty Drawback of Taxes & Levies should be provided to Garment, Home textile and fabric exports @ 7 percent, 6 percent and 5 percent as per notification No. 1(42)TID/17-RDA dated 23rd January, 2017. Moreover, an additional 2 percent drawback shall be provided, if the exporter achieves an increase of 10 percent or more in exports during current financial year over previous financial year. Furthermore, an additional 2 percent drawback shall be allowed for exports to non-traditional markets.

Bilwani further proposed that the duty drawback of taxes and levies system should be fully automated and the exporters should not need to apply. Upon receipt of export proceeds, the DDT/DLTL payment should be electronically transferred to exporters, without human involvement. In this manner, the payment shall not be time-barred.

For ease of doing business, long term financing facility (LTFF) on purchase of machinery and BMR, Export Finance Scheme (EFS), LTFF for infrastructure development and LTFF for exporters / indirect exporters should be continued. In said schemes, govt provides discounts to those want to avail such facility. In case, those exporters who are not availing LTFF & EFS should be given same discount rates in shape of grant on the basis of their export value.

Bilwani observed that generally the big exporters can easily avail such facility while the small exporters find it difficult to complete the bank formalities which is the main reason that they do not apply for facilities like LTFF and EFS.

Bilwani emphasized that it is crucial to provide such support small exporters so that they can progress and grow. Yesterday's small exporter is a medium exporter of today and will become a big exporter of tomorrow.

For export facilitation, PHMA also proposed that temporary importation schemes should be simplified and all such schemes should be automated whereby the exporters shall apply online through Textile Division's RDA Cell and application should be processed in the specific timeline within 24 or 48 hours, tariff rationalization of textiles value chain, customs duty drawback rates should be revised time to time by customs authorities with the consultation of ministry of commerce and export associations and customs rebate should be paid electronically along with export proceeds, revival of zero rating for textile value chain and import of textile machinery and its spare parts at zero rate without taxes & duties, Sick units should be handed over to existing exporters having growth of 10 percent or more.

Moreover, export development should be abolished and instead import substitution development fund should be established and charged @ 1 percent of import value on luxury goods and not on raw and industrial materials.

Further, revitalization of PTCL and KGCC is imperative and must be completed in the given timeline under a full-fledged plan. Industrial complexes / buildings shall be constructed on modern line and should be rented out to exporters on 50 percent less rent prevailing in the market. Such projects should be handed over to existing exporters having growth of 10 percent or more on fair terms and conditions whereby the said exporters shall give a comprehensive plan for export enhancement along with targets in specified timeline. In case of failure and non-achievement, Premises shall be taken back by the authority. With regards to establishment of new garment cities and adding buildings in LGCC and FGCC, he proposed that first, appropriate infrastructure must be provided to the existing Garment Cities Projects so that the export units should start production and export followed by establishment of new garment cities and adding buildings. He lamented that in the oldest existing industrial zones in Karachi necessary infrastructure and facilities still lack, CETPs are not constructed, roads are broken, frequent load shedding of power and gas, interrupted supply of utilities, miserable condition of Fire System which needs to be streamlined.

In respect to export projection of Knitwear sector which is the largest sub-sector of textile group and most labour-intensive, he forecasted its export to tune of $3.56 billion in FY2024-25 from existing $2.79 in FY2019-20 which is based on facilitation and support being provided by the Government to reduce to cost of manufacturing bringing at par or below with the regional competing countries and in terms of continuous and uninterrupted supply of utilities 24/7 to export oriented industries, tariff rationalization, effective implementation export facilitation schemes and continuous of export package relating to duty drawback of taxes (DDT) and drawback of local taxes and levies (DLTL).-PR

Copyright Business Recorder, 2020

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