Refund of Rs 25 billion collected as taxes: textile exporters seek FTO's help

The value-added textile exporters seek the Federal Tax Ombudsmen's (FTO) help to get refunds of Rs 25 billion collected as taxes and levies under the textile policy to underpin their ailing units in the fresh financial turmoil. The exporters have also demanded for appointment of Federal Trade Ombudsmen to facilitate the local traders at a meeting with FTO, Dr Muhammad Shoaib Suddle, at PHMA House on Saturday.
The Chairman of Pakistan Apparel Forum (PAF), Muhammad Javed Bilwani, and Chairman of Pakistan Hosiery Manufacturers and Exporters Association, Junaid Makda, led the discussion and apprised the FTO about the apparel textile exporters' tax related problems.
They said that the ECC had approved the pending refunds, which the government had also passed in the fiscal budget, but the exporters were still denied to receive Rs 25 billion. They showed worries that the present financial crisis of the industry could become severe if the exporters failed to get the refunds. They also complained about lodging of FIR against exporters by the Customs for making purchases from a company that till then had not been officially blacklisted, and demanded introduction of a proper system to protect the tax payers' interests and solve their problems.
They also complained that the exporters had not previously been allowed, for the last two years, to submit applications for refunds of federal excise duty, saying that the FTO should help them submit their claims for the old and new refunds. However, Dr Suddle made it clear that the exporters' demand for Rs 25 billion refunds was genuine but did not fall under his legal jurisdiction to play his full role, saying that he had talked to Secretary Finance in this regard. He said these were the provincial and local governments' taxes and levies and were not dealt by FTO, adding that the exporters should rely on him.
He informed the exporters that FTO had been involved in trade related issues and on its identification of about 7,922 missing containers, imported under Afghan Transit Trade (ATT), the government had been able to probe the scam and now it had recovered about 30,000 such containers. He said the non-commercial missing containers in Pakistan under ATT import were separate, which could increase the number.
He said the impact from ATT missing containers had been severe on the national revenue collection, which according to him, was about Rs 70 billion. Besides, the illegal trend had damaged the local manufacturing industry of garments. The FTO said since the scam had been unearthed, about 60 percent decline was witnessed in overall imports under ATT, which also helped the trade become largely regularised and earned Rs 1 billion tax revenue to the country's exchequer. He said 74 percent decline occurred in import of textile fabrics, 47 percent in electronics items, 44 percent in vehicles, 76 percent in sugar and 69 percent in ball bearings.
About the missing of files at the tax offices, he said it was a sign of corrupt motives and insincerity, and assured the exporters of solving their problems of submission of duplicate files asked by the tax authorities. He said the issue of pending refunds of exporters for federal excise duty would also be addressed at once.
Regarding the Federal Trade Ombudsmen, Dr Suddle said he was personally in favour of appointment of trade ombudsmen to solve the trade disputes. He added the foreigners were also shy to invest in Pakistan for the lack of such a pivotal setup. On the occasion, Naqi Bari, Khawaja Usman, Rafiq Godil and a number of exporters were present.