A joint meeting of Chairmen, of all Value-added Textile Associations, PHMA PAKSEA; PRGMEA; PCFAMEA, TMA, APBUMA, PCMA, APTPMA etc was held at PHMA House Karachi on Monday. The meeting called after the last week's announcement of imposition of Regulatory Duty on import of cotton yarn by Finance Minister, Ishaq Dar, Advisor to the Prime Minister Haroon Akhtar and Chairman, FBR were also present on the occasion.
The joint meeting held on Monday strongly opposed the imposition of Regulatory Duty on import of Cotton Yarn. The participants took a serious note of the announcement by the government, which painted a picture of non- existence of Value-added Sector and it was portrayed that the only All Pakistan Textile Mills Association (APTMA) had a meeting with government.
It was further noted that Value-added Textile Sector participated in the meeting to get some relief for the Value-added Sector as the exports were going down drastically and government was well aware of. It was surprisingly observed that the announcement except the reduction in LTF and Refinance supported the Spinning Sector only which does not support the Value Added Sector at all rather it enhances the cost of goods produced by the Value Added Textile Sector.
It was further noted that the biggest crisis is in Value Added Sector which exports 80 percent of Textiles in monitory terms, their point of view, argument and deliberation were completely overlooked. In fact Saturday's meeting enhance the cost of Value Added products by 3-4 percent as yarn prices would subsequently increase market similar to the percentage of Regulatory Duty imposed. Here they also did not agree that DTRE would help as DTRE is not possible for Medium and Small Enterprise, which is backbone of Textile.
While appreciating the gesture of the Finance Minister and its team of the Value-added Sector and agree to its point of view and understanding that reduction in cost of manufacturing is inevitable to sustain in the international market, they also understood that orders by the foreign buyers are shifting to the regional competitors as these countries are supporting their Textile Industry by giving host of incentives in cash and also with the reduced input cost specially in term of rate of utilities.
Meeting unanimously decided to appeal to the Honourable Finance Minister and Honourable Advisor to relook into the decision of imposition of Regulatory Duty and they strongly felt that few very urgent steps are required to be taken such as, zero rating of Sales Tax, Withdrawal of GIDC and reduction in Tariff of Gas, Reduction in the Tariff of Electricity. Utility rates must be at par with competing countries.
They further appealed that there are several problems faced by the Value Added Textile Sector like imposition of Sales Tax on machinery; Imposition of Duty on import of Generators; payment of pending DLTL Claims; Positive amendments in Sales Tax and Income Tax Laws; doing away with EDF; Reduction in rate of Withholding Tax; Duty also be imposed on export of Cotton Yarn and over and above change of mindset of tax authorities to become business friendly. Meeting was of the opinion that the worthy Finance Minister do understand the pathetic condition of Value Added Textile Sector today and he also understand that in spite of GSP plus overall exports are going down and all this reflects the entire story of higher inputs lesser incentives and non conducive environment; energy crisis; high cost of utilities which are the basic ailments of the Sector. The Honourable Finance Minister also understands that supporting Value Added Textile Sector fetches much more Foreign Exchange than supporting the Raw Material manufacturing (Yarn) as Value Added Sector.
Export of 1 pound of cotton yarn fetches US $1.65. While export of Value Added Textile converted from 1 pound of yarn fetches US $4.04. They were sure that being a Political Government and in accordance to their manifesto they have promised the people of Pakistan with creation of jobs and this can only be achieved with the support of Value Added Sector specially Garment and Apparel Manufactures as today one sewing machine costs one thousand dollars and creates 3 jobs which is impossible in any other sector plus highest foreign exchange earning. In conclusion they appealed that the partial announcement made on Saturday may be put in abeyance and once the entire package which the Honourable Finance Minister and the Honourable Advisor promised to announce after another round of meeting with Value Added Sector after their return from US trip, as this would be in the larger interest of justice and would save the Value Added Textile Sector and its sense of deprivation.-PR
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