KARACHI: The textile sector has termed the measures, announced by the government in the budget, as insufficient for a significant increase in the country's exports.

The value added textile sector has asked for the more relief and concessions to achieve the double digit export growth target and earn over $26 billion foreign exchange in the next fiscal year 2021-2022 (FY22).

Leading exporter and Chairman Pakistan Apparel Forum (PAF), Jawed Bilwani has welcomed the government's announcement of new Uniform Export Facilitation Scheme, however, expressed disappointment on the measurers announced in the budget for the textile sector. "Most of our [textile sector] demands were not considered in the budget," he said.

He said that major demand of value added textile exports associations was restoration of Zero Rating on GST "No Payment No Refund Regime" through revival of SRO 1125 in letter & spirit, but the federal budget is missing this important demand. The revival of zero rating regime will help resolve the liquidity issues of the textile exporters.

Bilwani said that the federal government has allocated some Rs20 billion for the DLTL as against the outstanding dues of Rs32 billion. "We believe that with current budgetary measures, the export is likely to increase 5-6 percent in the next fiscal year," he added.

The federal government has allowed duty import of cotton yarn, which is good news for the textile sector. At the same time, there is need to consider other demands of textile sector including suspension of Export Development Fund surcharge, reduce and fix tariffs of electricity, indigenous gas & RLNG.

Ijaz Khokhar patron-in-chief Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) said that budget measures are insufficient for a significant increase in the country's exports particularly textile exports.

He said that despite the largest export oriented sector, most of the demands of the value added textile were not considered in the federal budget 2022. "Our demand of Zero rating was not accepted, because of which the textile sector will remain faced with liquidity issues due to non-payment or delay of refund claims," he added.

Khokhar said that the federal government has allocated some Rs200 billion for three major crops i.e. wheat, rice and cotton. The cotton crop is on the lowest level and there was need to allocate more funds for the cotton crop to achieve a better production to reduce the import of cotton and cotton yarn. Currently, the textile sector is facing shortage of cotton yarn and spending a huge foreign exchange on the import of this commodity, he mentioned.

He urged the federal government to revise it measurers for the industry and export sector to achieve a double digit export growth in the next fiscal year.

Chairman Pakistan Weaving Mills Association, Yousuf Yaqob said that the budget measures will not ease the liquidity issues of the textile sector as they will have to pay 17 percent sales tax. "Our demand for zero rating or reduction in the sales tax from 17 percent to 5 percent," he said and added that both demands were not considered in the budget.

Copyright Business Recorder, 2021

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