PRGMEA issues SOS call over acute financial crisis in industry – Business & Finance

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LAHORE: The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has issued a desperate SOS call over acute financial crisis of the industry amidst delaying sales tax refunds, rising markup rate, soaring fuel and energy cost and worse power shutdowns, expressing a fear of breakdown in whole export-oriented textile supply chain in the county.

In an appeal to the Prime Minister, Chief Justice of Pakistan, Chief of the Army Staff, Finance Ministry and Commerce Ministry, PRGMEA north zone chairman Sheikh Luqman Amin stated that the situation has not improved at all despite various appeals to the departments concerned.

“Now we are sending an “SOS call: Apparel industry amidst acute financial crisis and the ensuing breakdown of value-added textile chain”, which needs the quick response, as country needs dollar and we are fully capable of doing this. We have plenty of orders to earn dollars but having no level-playing field to fulfill these orders due to indifferent and callous attitude of the authorities,” he added.

Calling for quick and serious steps to sustain the growth of apparel exports, Sheikh Luqman Amin said that the new Textile Policy had made a commitment to the provision of gas and electricity at competitive international prices, a continuation of tariff rationalization, and sticking to the policy of duty drawback on local taxes and levies.

He lamented that the previous Textile Policy had also failed to achieve its targets, including enhancing textile exports from $ 13 billion to $ 26 billion, doubling value-addition from $ 1 billion per million cotton bales to $ 2 billion per million cotton bales as well as the creation of three million jobs in five years.

It was a good news that after the expiry of last Textile Policy the government came up with a new policy, comprising new targets, incentives and recommendations while all stakeholders were also taken on board before the finalization of the new policy, which was a good sign for the economy and industry but it should also be implemented, he demanded.

He expressed the hope that Pakistan can achieve this target provided the local industry is facilitated with regionally competitive energy tariffs and a business-friendly environment.

PRGMEA north zone chairman Sheikh Luqman Amin urged for increasing ease of doing business, lowering cost of production, paying early refunds to solve liquidity crunch, relaxing import policy for industrial raw material, and equalizing the energy tariff across the country.

He said all the stuck-up claims, including DLTL, DDT, Customs rebates, and sales tax rebates, which are pending for the last six months, should be released.

He voiced the fear that the government has not been able to release the sales tax refund claims regularly because amount of exporters’ liquidity has been started to stuck up with the government due to faulty and defective system.

He asked the government to work on a fast track plan to address energy issues too. Priority should be given to the export-oriented garments sector, which was the highest value-added link in the entire textile value chain. PRGMEA leader called for exemptions from power outages for exporting SMEs, as the power crisis across Pakistan has intensified and overall electricity shortfall getting worse.

The PRGMEA regional chief urged Prime Minister Shehbaz Sharif, Chief Justice of Pakistan Umar Ata Bandial, Chief of the Army Staff General Qamar Javed Bajwa to intervene as it is the national interest and direct the tax agency to remove bottlenecks in the new refund payment system of the FBR, as exporters are facing a severe liquidity crunch due to delay in payment of sales tax refunds.

Copyright Business Recorder, 2022

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