The business community and exporters have expressed mixed reaction over the Finance Supplementary (Second Amendment) Bill, 2019 passed by the National Assembly, with some terming it a business-friendly reform package, while others link its impact with implementation.
Talking to Business Recorder, representatives of different manufacturing and exporters associations said the implementation of the tax reform package would facilitate investment, promote industrial growth as well as boost the country's stagnant exports.
Chairman Pakistan Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) Zubair Motiwala said all the decisions of the government so far were encouraging, and would help to boost exports and investment.
He said that through the amended bill the government had established Federal Board of Revenue (FBR) Refund Settlement Company (Pvt) Limited for issuance of sales tax refunds through bonds, but there was no schedule. "We do not know when these bonds would be issued," said Motiwala, adding that such promises were made in the past as well, but not fulfilled which resulted in liquidity crunch for the exporters.
He further said the government was asking the five zero-rated exports sectors to pay Gas Infrastructure Development Cess (GIDC), but they did not have the ability to pay. The government has not addressed this genuine issue of industry. He further said that the finance bill has not provided any incentives for lobbying as well as marketing Pakistani products abroad to encourage exports.
Pakistan Hosiery Manufacturers & Exporters Association (PHMA) Central Chairman Muhammad Jawed Bilwani appreciated government efforts to honour its promise to facilitate five zero rated export sectors.
He said the decision to clear refunds backlog of over Rs200 billion by issuance of bonds at an annual profit of 10 percent with a maturity period of three years was welcome. Exporters had given up any hope of getting their refund claims cleared, but the government announcement of issuing bonds had given them new confidence, Balwani added.
He said knitwear garment sector's share in the global market is 30 percent. During the current fiscal year, Pakistan's knitwear garments exports had grown by around 11 percent. Bilwani pledged that upon receipt of payments against refunds and with assurances of uninterrupted supply of gas and electricity, that sub-sector would increase its exports by 20 percent by the end of current fiscal year.
All Pakistan Textile Mills Association (APTMA) leader Gohar Ijaz said that failure to clear refunds for the past five years was tantamount to exporters' money being stuck and the government, for the first time, had shown a will to clear refunds and improve exporters' liquidity.
Initiatives like reducing/abolishing customs duty on the import of 45 industrial raw materials and inputs including zero percent duty on the import of latex, adhesive tape, evaporators and machinery for preparing, tanning or working hides, skins or leather and machinery for making/repairing footwear would help reduce the cost of doing business as well as encourage further investment in the country, exporters added.
Sarhad Chamber of Commerce and Industry (SCCI) representatives said the Finance Amendment Bill was actually a reform package aimed at boosting exports and accelerating industrialization in the country.
They said the customs duty and sales tax waiver on the import of machinery for the special economic zones would prove to be an important step towards achievement of economy revival.
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