KARACHI: President of the North Karachi Association of Trade & Industry (NKATI), Faisal Moiz Khan, urged PM’s Commerce and Investment Adviser Abdul Razak Dawood, to continue the DLTL policy to save business, particularly domestic exports, from destruction. To help exporters, the government must develop a comprehensive and positive DLTL policy and communicate it to all banks.
Expressing concern over the lack of clear policy regarding drawback on local taxes and levies and has been discontinued from 1st July 2022 and all the banks will not take any documents after 1st July 2022 in this regard.
Under which all banks will not take any documents after July 1, 2022. If the DLTL policy is withdrawn for any reason, it will destroy business, especially domestic exports, and exporters will face a financial crisis.
In a letter sent to Abdul Razak Dawood, Adviser for Commerce, and Investment to Prime Minister Imran Khan, NKATI president Faisal Moiz Khan drew attention that DLTL policy was announced for five years.
It is unknown at this time what he will do after leaving the post.
The State Bank of Pakistan is not accepting the documents of the export which is going on from 1st July due to which all the Banks of Pakistan are also refusing. This issue should be resolved immediately and the policy of DLTL should be continued.
“If DLTL is skipped in the middle, it will adversely affect Pakistan’s exports and exporters will be economically disadvantaged and their export will be ruined. It is not possible to export goods as well as taxes from Pakistan, which is one of the impossibilities.
If DLTL is not refunded, then it creates a negative impact on Exports”, he pointed out.
He further said that it is pertinent to state that to improve and enhance exports from Pakistan, exporters have been given calculated facilities/incentives. The objective of these facilities/incentives is to make exports zero rated, which means that the impact of tax paid is netted off by subsequently allowing refund or input adjustments equivalent to the tax already paid.
NKATI president said that to facilitate exporters, the Ministry of Commerce has provided the facility of duty drawback on local taxes and levies to textile, non-textile & Exporters under SRO. 711(I)/2018. Exporters’ commitment from foreign buyers will also be affected which will also cause irreparable loss to export orders.
The Government should adopt a positive strategy in this regard and play its role. Despite the passage of six months’ time, no positive and coherent policy has yet emerged from the Government. Nor have the banks been informed / provided with a comprehensive policy about DLTL.
Faisal Moiz Khan argued that the 17pc sales tax should be abolished because raw material costs have skyrocketed and shipping costs have also risen, making it impossible to compete with the international market, which has resulted in a financial crisis. No sales tax is needed to protect the export industry.
“At the same time, the sales tax that has been imposed on the Export Processing Zone is also inappropriate, which is likely to affect exports. If Pakistan’s exports are affected, then Pakistan will face a never ending economic crisis due to which trade activities will stop”, he feared.
Copyright Business Recorder, 2022