Textile Industry Demands Multiple Reforms in Upcoming Budget

The value-added textile exports associations presented their proposals to the Federal Government for Budget 2021-22, demanding that the zero-rating taxation regime is restored and duty drawback of taxes (DDT) are continued.

The textile exporters made these demands while addressing a joint press conference at Pakistan Hosiery Manufacturers and Exporters Association (PHMA) House.


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The textile industry officials also demanded that Technology Up-gradation Fund (TUF) scheme is continued while the final tax is reduced and withholding tax is lowered to 0.5 percent in the budget.

The leaders of the associations also demanded that the Export Development Fund (EDF) surcharge be suspended, and the electricity tariff is reduced and fixed in the forthcoming budget.

Council of All Pakistan Textile Mills Associations Chairman, Zubair Motiwala, Pakistan Apparel Forum Chairman, Jawed Bilwani, PHMA Chairman, Tariq Munir, and other leaders of different associations participated in the joint press conference.

Motiwala said that their top demand is to restore zero-rating on GST. He said that this demand was made because the imposition of 17 percent GST blocked liquidity, which has closed down 30 percent of SME exporters.


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Exporters fall under the Final Tax Regime and are required to pay one percent WHT of their export proceeds as of now. The speakers at the conference said that WHT should be reduced halved to 0.5 percent as this would improve liquidity for exporters, which they can use to enhance exports.

They also said that the revision of tariff on electricity, indigenous gas, and RLNG for exporters is crucial to compete internationally and capture more markets, and therefore, it should be fixed at 7.5 cents/kWh, Rs. 819/MMBTU and $6.5/MMBTU, respectively, for the next five years.