KARACHI: Stakeholders in the export-oriented industrial sector have demanded that the government should expedite payment of stuck-up refund claims worth Rs 250 billion.
The executives of industrial organisations have lamented that officials concerned were not paying attention to the issue.
The amount that has yet t be cleared includes Rs40 billion in sales tax refund claims, Rs10 billion customs duty rebate and Rs5 billion in duty drawback of local taxes (DLTL) and Rs20 billion to be paid to exporters under Prime Minister’s incentive package for exporters.
They said that prime export industry has been bearing great financial burden due to stuck-up money, therefore, the Federal Board of Revenue (FBR) should look into the matter and ensure early release of sales and income tax refunds.
“Deferred claims are included in pending amount and total figure of pending refund claims is around Rs 150 billion. The government has so far released Rs 16.5 billion out of Rs 46 billion PM export incentive package announced in October.”
In addition, sales tax refunds of Rs26 billion of ROPs up to April 2017 through electronic system and clearing sales tax refunds of over Rs15 billion of ROPs issued up to August 2017.
They urged the Ministry of Finance and the FBR to take cognisance of the situation and expedite payment of refund claims.
Agha Saiddain, representing the tanning sector; Ghulam Rabbani, the yarn and cotton sector; Jawed Bilwani, the apparel; Irfan Iqbal Sheikh of the Pakistan Industrial and Traders Associations Front; and others, commenting on the health of the country’s economy, said that Pakistan had almost always been affected by inflation as a result of rising costs in all spheres of life. The country’s economists have always juggled with the challenge of rising prices and have struggled to create an economic environment where ordinary Pakistani citizen can maintain decent living standards.
They were of the view that Pakistani rupee has never been strong against dollar and has grown weaker lately. An important reason for this is that Pakistan has never been a net exporting country. Almost always, its import bill has far exceeded its exports by a long margin. Over the last few years, Pakistan’s exports have become almost stagnant due to many reasons, particularly the chronic energy crisis. On the other hand, Pakistan’s imports have increased by leaps and bounds.
There have been calls for devaluation of Pakistani rupee. The growth in imports has worsened the situation and has created depletion in Pakistan’s foreign exchange reserves, putting extra pressure on the currency. The rupee has now been allowed to ‘adjust to market conditions,’ which has contributed to its becoming weaker. It must be realised that this kind of ‘devaluation’ will not bring any solutions to Pakistan’s troubled economy.
The high cost of manufacturing has caused for the drop of textile made ups, garments, denim, leather and leather products, surgical goods, onyx and marble products and other non-traditional export-produces.
It is becoming harder for exporters to compete with other countries that have cheap cost of production and government levies.
Our customers were turning back and opting for other countries and something should be done on urgent bases in this regard.
Sanaullah Khan was of the view that domestic manufacturers were facing pricing pressures due to capacity additions and cancellation of orders.
Pakistan is getting deeper into the debt trap, with the country borrowing more and more from international donor agencies. In the coming months, while Pakistan will borrow money from the international donors to balance its budget, it will also borrow to service its debts and avoid becoming a defaulter, Ghulam Rabbani observed.
The country’s forex reserves stand at around $12.9 billion declining from $18.5 billion that stood couple of months. This situation asks government financial and commerce managers to ponder and take steps to facilitate exports.
Published in Daily Times, March 28th 2018.