LCCI for restoring zero-rated regime for 5 export sectors

LAHORE: Lahore Chamber of Commerce & Industry (LCCI) on Thursday urged the government to restore zero-rating regime for five export sectors as it had caused unrest among the businessmen.

LCCI President Almas Hyder, Senior Vice President Khawaja Shahzad Nasir and Vice President Faheem-Ur-Rehman Saigal said that export revenues would be affected by the withdrawal of this zero rated facility.

They suggested the government to introduce an automatic and efficient system of refund payments whereby 75 per cent of the refunds should be paid through the bank upon the issuance of the attested copy of Bill of Lading while the remaining 25 per cent of refunds should be paid through the banks against the export proceeds after 30 days.

They said that government had announced withdrawal SRO 1125 under which five export-oriented sectors were exempted from sales tax and its withdrawal would add burden to the government exchequer besides hitting the national exports badly, adding that exporters were working in difficult circumstances and making their all out efforts to bring much-needed foreign exchange in the country. Withdrawal would squeeze the working capital of the industry and dry out liquidity from the market, they asserted.

LCCI office-bearers suggested that instead of opting for withdrawal of zero-rated facility, government should devise a proper mechanism that could lead export-led growth. "Textiles, leather, carpets, surgical instruments and sports goods as major part of exports is associated with these sectors," they said and added that five-zero rating sectors were documented and contributing around 70 per cent of total exports and 50 per cent in employment but withdrawal of zero-rated facility would badly affect sectors.

The LCCI office-bearers said that continuation of zero-rating facility for the export-oriented sectors would help promote country's exports, and boost local business community's trust as well as give a very good message to foreign investors.

They said that zero-rating facility would also bring down the industrial cost of doing business and Pakistani products would be able to win their due share in the international market.

They said that country could not afford to lose international export market therefore government should continue zero rating facility for the export-oriented industry in the larger interest of the economy.