Textile industry: government urged to create new job opportunities by spurring growth

All Pakistan Textile Mills Association Chairman SM Tanveer has urged the government to use the growth potential of the textile industry for employment creation and not for revenue generation. "It should avoid burdening the textile industry with further taxation to achieve this target," he stressed.
He has put forward budget proposals, saying that the foremost is to operationalise the closed capacity by providing guaranteed uninterrupted energy supply to the export oriented Textile Industry at competitive rates. "Fiscal incentives including zero rating tax holiday, interest support for new investments in all textile sectors should be ensured without excluding the spinning sector, which has lagged behind competitors due to the present inefficient technology," he added.
The textile industry should be zero rated in terms of all the federal, provincial, local, cess, levies and duties by factoring in the drawback of local taxes and levies by extending 5 percent, 10 percent and 15 percent duty draw backs against the export of yarn, fabrics and made-up/clothing respectively. The government should clear the long pending refunds, which are estimated to be around Rs 100 billion enabling ample liquidity for the industry to remain afloat. He said the government should restore the original zero-rating regime. 'The government should not burden basic raw materials including polyester, staple fibre (PSF), viscose and cotton with upfront duties and taxes including customs @ 6% on PSF/ viscose, cotton with 5 % Sales Tax and 5.5 % Withholding Tax.
Allow import of generators/power houses/boilers for industry at zero customs duty for encouraging in-house generation and consumption of electricity. All sustainable energy solutions should stay at zero custom duty slabs for Textile Industry to undertake investment initiatives. He has also demanded zero duty on import of spare parts and all capital goods import. In order to safeguard the domestic commerce, he urged to impose 15 percent regulatory duty on import of yarn and fabrics meant for domestic consumption. The government should curb smuggling of stock lots, un-stitched clothes to protect domestic commerce.
He has demanded reduction of turnover tax to 0.5% with adjustment facility and reduction in corporate tax rate to 25% and rolling back of the presumptive tax regime. It is an opportune time for the financial managers to announce investment and growth oriented budget, he concluded.