PHMA urges government to abolish Export Development Surcharge

The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) on Saturday asked the government to abolish the Export Development Surcharge until existing pool of funds is exhausted. Reacting to the proposed federal budget for next fiscal year 2018-19, Chief Coordinator, Pakistan Hosiery Manufacturers & Exporters Association (PHMA), Muhammad Javed Bilwani said that the government should not stop the EDF collection from exporters unless the existing huge funds are utilized for the purposes.
He said that the export should be reduced to 0.5 percent from one percent and demanded the zero-rating of industry should be legislated into a law from SRO system. Further, he proposed, the government should disburse the exports approved refunds immediately.
The PHMA chief coordinator also sought an introduction of reduced tariff of electricity and gas tariffs for the five zero-rated export sector. "Manufacturers-cum-Exporters - Stitching Units should be allowed to import yarn under DTRE and DTRE rules need to be revisited to make them export friendly," he added.
He said that the fiscal budget failed to address the growing problems of export sectors of the country that fetch billions of foreign exchange adding that the proposed budget remained focused on general trade and industrial sector. He however appreciated the government for continuing the zero-rating regime.
Bilwani asked the government to revisit its fiscal plan since it has too little for the export sector to survive. "Exporters problems will multiply owing to liquidity crunch and as result Trade Deficit will further widen from US$27.3 billion. From last consequent 19 weeks SBP Reserves have been drastically declining and currently stand at US$10.90 billion," Bilwani said.
Appreciating few 'positive' budgetary steps, he said that the move will help the general trade and industry sector with a continuation of Tax Credit on BMR on new investment or establishment of industry start-up. "Reduction in tax slabs; curtailment of discretionary power of tax collectors and reverted back to the Federal Govt instead of FBR with the approval of Minister-Incharge; reduction of Customs Duties on certain items; rationalization and reduction of Tax Rates for individuals, AOPs and Companies," he added.
Warning the government, he said that the non-release of DTT claims under the prime minister package, besides the long withheld refunds will scale back the export growth further, saying that "only Rs 21.5 or 16.38 percent of the total PM export package was released till date to exporters out of Rs 180 billion. In this Budget, once again, hopes and assurances were given but no a firm commitment".