Daily Times

KARACHI: Despite an announcement, the failure to issue a notification that a zero-rated tax regime had been reinstated for the five major export oriented sectors, including textile, by the federal government got exporters into trouble, Daily Times has learnt.

Textile exporters were caught by surprise to find out that the notification had still not been issued despite Federal Minister of Finance Muhammad Ishaq Dar making a commitment to that effect with exporters before the annual budget this year.

The exporters are experiencing technical difficulties getting zero rating exemption as the custom authorities are not cooperating with the exporters no S.R.O had been issued by Federal Board of Revenue (FBR) in this regard. As a result, a large number of export consignments have been withheld by exporters. Earlier, the government announced zero rating or no-tax and no-refund regime for the textile sector, which is the major export oriented sector and contributes more than 55 per cent of foreign exchange earnings. The export sector hailed the government’s decision, terming it a positive step toward the restoration of viability of the ailing textile sector.

Chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), S. Z., Arshad Aziz has urged the Federal Minister for Finance and Chairman FBR to immediately issue the notification of zero-rating of five export sectors so that exporters can make shipments as per schedule. He said that value-added export sectors were waiting for the issuance of SRO or notification because they had to make shipments of exports as per the rule of “no-payment, no-refund”.

Arshad said the zero-rating tax would boost Pakistani exports, and in order to get the best results (i.e. 20% to 25% increase), the government should immediately release frozen refund payments against sales tax, duty drawbacks and drawback on local taxes and levies (DLTL) as well as bring down tariff of electricity, gas and water for export. He advised the government to continue with the economically intelligent policies so that country would become self-sufficient instead of seeking loans from International Monetary Fund (IMF) all the time.

Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum and Chief Coordinator, Five Export Oriented Sectors said ‘Despite a distinct announcement by the Prime Minister on 13th February, 2016 for grant of zero-rating to the export sectors in the new Budget 2016-2017, the exporters have been compelled to hold hefty consignments of exports till zero rating is implemented in June, 2016’.