PTEA for expeditious disbursement of all outstanding refunds

Pakistan Textile Exporters Association (PTEA) has stressed for expeditious disbursement of all outstanding refunds as the Covid-19 pandemic has significantly impacted the cash flow squeezing the financial streams.

Commenting over the prevailing situation here on Wednesday, Chairman PTEA Sohail Pasha expressed serious concerns over unnecessary delay in disbursement of pending refunds of exporters despite the commitment of the Government for liquidation of Rs 100 billion pending refund claims to save the export industry from the adverse impacts of Covid-19 pandemic.

He appreciated government's measures to save the economy from negative impacts of this pandemic; however termed it unfortunate that the benefits of these initiatives could not be transmitted to the export industry as no progress has yet been made in processing/payment of long outstanding refunds of textile exporters.

Giving details, he said that no mechanism had yet been devised to start the processing of deferred and u/s 66 sales tax and income tax refund claims pending prior to July 2019; whereas huge amounts of sales tax claims have been deferred on FASTER system from July 2019 and the same have not yet been replicated/processed for payment. He added that in certain cases, sales tax claims submitted on FASTER system for July and onward are still lying unprocessed; whereas payment of custom rebate has also been stopped. This situation has created immense problems for textile exporters as the government, on one side, is striving hard to save the economy from the negative impacts of coronavirus outbreak but on the other side, certain constraints are swelling the financial crisis and ultimately damaging the export industry. He demanded immediate liquidation of all pending refund claims to ease the financial stress for textile exporters.

PTEA's Patron-in-Chief Khurram Mukhtar was of the view that the most affected value chain for Pakistan was textiles and apparel which had faced large scale cancellation or deferral of export orders. "Resultantly, industrial production has been slowed down and wheels of industry have come to halt. If the situation prolongs, there will be unmanageable level of unemployment," he apprehended.

Government should step out with long term measures to cope with this abnormal situation.

Seeking government's support, he demanded restoration of zero-rated regime for five export sectors and sustainable energy tariff for five years. He urged for payment of textile policy incentives Technology Up-gradation Fund (TUF) and Mark-up Support subsidy to keep industrial wheels running and save the livelihood of millions.

He said that 50 percent of Duty Drawback of Taxes (DDT) was subjected to 10 percent increase in exports; this 10 percent growth covenant should be withdrawn under current situation.

Vice Chairman PTEA Haris Yousaf said the government should also reduce the cost of doing business and encourage the domestic & foreign investors to make investment in the country at this critical time when the global economy is shrinking. He urged the government to take preventive measures and develop strategy to protect the pace of economic and trade progress of Pakistan from likely impacts of world economic slowdown.