The Economic Coordination Committee (ECC) of the Cabinet is expected to approve textile package on Thursday (today), official sources told Business Recorder The package has been finalised with the efforts of Prime Minister''s Special Assistant on Revenue Haroon Akhtar Kan. International Monetary Fund (IMF) has also been taken into confidence on this package. On October 17, 2015, Finance Minister Ishaq Dar announced imposition of a 10 percent regulatory duty on the import of yarn, grey fabrics and processed fabrics effective from November 1, 2015.
According to the agreement between the government and All Pakistan Textile Mills Association (APTMA) decisions have been taken to facilitate local manufacturers and supply chain of the textile sector. The government has agreed to impose 10 percent Regulatory Duty (RD) on the import of cotton yarn and grey & processed fabric with effect from 1st November, 2015. Secondly, Export Re-financing Facility (ERF) rate shall be reduced by 1 percent (100 basis points). Thirdly, ginning and spinning sectors shall qualify for Long Term Finance Facility (LTFF). Fourthly, the rate of LTFF shall be reduced by 100 basis points. Fifthly, to resolve the issue of pending sales tax refunds, committees consisting of representatives from industry and the FBR shall be constituted in each Regional Tax Office (RTO). Sixthly, the FBR efforts shall be enhanced for prevention of smuggling.
A senor representative of Bedwear Association, Shabir Ahmad said that there is nothing for the value added sector and also Bedwear Association was not invited for the meeting. "The so called agreement will not bring desire results for the falling exports. The government have to take some drastic steps for stopping the falling exports and not only falling but also increasing the exports and to increase employment and foreign exchange for the country," he added. He was of the view, refunds are struck up. The government must immediately withdraw the export cess of 0.25% which is charged on all exports and the collection on this is about Rs 5 billion. Further 5% should be paid as duty drawbacks and also reduce the gas and electricity charges.