Daily Times

Pakistan Industrial and Traders Associations Front has warned that continued cut in rupee value would not yield the desired impact on enhancing exports, urging the government to restore zero-rating regime for five export sectors to lower the cost of production to increase exports.

PIAF former chairman Irfan Iqbal Sheikh said that export revenues would be affected by the withdrawal of this zero rated facility and the government, instead of providing facilities to the exporters, is depreciating the rupee, which is positive neither for the export sectors nor for the whole economy.

He suggested the government to introduce an automatic and efficient system of refund payments whereby refunds should be paid through the bank upon the issuance of the attested copy of Bill of Lading.

Moreover, he lamented that the rupee continued to hit a new record low against US dollar in the inter-bank market, PIAF former Chairman, Irfan Iqbal Sheikh said in a statement. He said, Over 15 countries in the world had devalued their currency but they achieved no benefit from this step. We will have to match everything with them, from currency appreciation and depreciation to cost of production. He stated that the balance of payments stability should be ensured with the fall in current account deficit and more-than-adequate availability of foreign financing.

Irfan Iqbal, who is also former Senior Vice President of the Lahore Chamber of Commerce and Industry, said Pakistan’s trade deficit is increasing badly, where it needs to increase exports. He said rates of utilities; including electricity and gas were higher in Pakistan as compared to neighbouring countries in the competition. Rates of labour, raw material, port and other expenses were also higher in Pakistan.

PIAF Chairman, Mian Nauman Kabir said that Pakistan’s utility charges are higher in the region. He said that billions of rupees of exporters were stuck with the government as sales tax rebates and others but the government was not serious to pay them back.

Although pressure also mounted on Pakistan after a decline in its exports, government was bound not to devalue it under an agreement with the IMF. Government cannot devalue the rupee, but it uses some tools to control or unblock the depreciation and appreciation,” he said.

He argued that any depreciation in the rupee would not have any impact on exports, as history shows exports were not increased. It will temporarily increase the margins of the exporters.

He suggested that instead of removing tools to depreciate the rupee, the government should restore zero-rated regime for the exporters and provide them relaxation in utility charges and give them sales tax rebates that would encourage them for more exports. Besides, the government should work out to bring the outgoing foreign investment back in the country.