Unavailability of cotton yarn and non-payment of duty drawback of taxes and income tax refunds are adversely affecting the export growth putting millions of dollars export orders at stake. Government must accord immediate remedial measures as further delay will seize the industrialization, halt the export growth and lead to an unmanageable level of unemployment.
Talking to media here on Thursday, Chairman of the Pakistan Textile Exporters Association (PTEA) Muhammad Ahmad expressed grave concern over cotton yarn crisis. Extreme shortage of cotton & unprecedented price hike of cotton yarn has almost disrupted the export cycle and textile industry has become economically unviable due to escalating prices on the back of short crop, he lamented. Cotton production is set to drop to a historic low during the year when demand is up by 13% with the textile sector operating at full capacity after decades, he added. With low production, country needs to import cotton in an effort to bridge the demand-supply gap. Low cotton productivity and ban on cross-border cotton import has spiked the price of cotton yarn and textile exporters are forced to pay a higher price for raw materials. He appreciated the Prime Minister Imran Khan for taking serious notice of cotton shortage and allowing the import from Afghanistan and Central Asian States via Torkham land route; however he considered it insufficient to meet the apparel industry’s raw material needs as importing yarn from central Asian countries is not only expensive but will take one to two months to reach Pakistan. In order to overcome the scarcity of basic raw material, he demanded a cross-border import of cotton yarn from India to ensure continuity in export growth.
Patron-in-Chief PTEA Khurram Mukhtar expressed concern over undue delay in disbursement of exporters’ Duty Drawback of Taxes and Income Tax refunds (over Rs. 50 million) as exporters’ liquidity has already taken a strong negative hit from adverse impacts of Covid-19. Government must take immediate measures to ease off the financial stress and gear up the export growth, he said. Giving details, he said that outstanding amounts of Duty Drawback of Taxes have been accumulated approx. Rs. 30 billion; resultantly textile exporters are facing severe financial issues. He maintained that in order to support the textile export industry during challenging times of Covid-19, the government made payment of Income Tax refunds up to Rs. 50 million; however, refund claims beyond Rs. 50 million are still pending. Claims even processed and ready for payment are not being disbursed. He stressed for immediate disbursement of Income Tax Refunds (over Rs. 50 million) & Duty Drawback of Taxes to address the financial issues of exporters.
Vice Chairman of PTEA Saqib Majeed was of the view that undue delay in approval of Textile Policy is resulting in deferral or even backing out of investors from possible investments in the textile chain. Implementation of textile policy would attract domestic and foreign investment in the textile value chain and the development of value-added sectors. He demanded immediate approval and implementation of textile policy to pick-up the growth pace of the textile value chain. He said that global markets are wide open and Pakistan can achieve significant increase in exports by encouraging investment in addition to enhancing competitiveness. It is the right time to facilitate the export sectors as we direly need to stabilize the economy because only the export sector has the ability to put the country’s economy on track and steer Pakistan towards economic prosperity. He demanded immediate payment of all outstanding refunds to robust the industrialization, increase exports and generate new job opportunities.
