Pakistan govt working out plans to make exports truly zero rated

Commerce Minister Khurram Dastagir after his separate meetings with the All Pakistan Textile Mills Association (Aptma and carpet exporters on Monday said that the government after two years of consolidation was now in a position to facilitate the exporting sectors through incentives, market access and a viable long-term policy.

During the meeting, Aptma chairman S.M. Tanveer apprised the minister of the precarious position of the industry that operating much below its capacity because of lack of global orders. He cited high cost of doing business in Pakistan and subsidies given by rival textile exporting countries as the main cause for this decline.

Dastagir said that the cumbersome issues of businessmen need right actions from different ministries, including commerce, finance, petroleum, and water and power.

Further acknowledging that the industry was in dire straits because of delayed refunds and many policy flaws, Dastagir said that from now on the government would engage with the textile sector regularly. He would also take up the issue of local taxes on textile exporters with other ministries and agencies to make the exports “truly zero-rated”.

The expected approval of the Strategic Trade Policy Framework next month would make a financing of Rs6 billion available to exporters under the government’s trade facilitation programme.

Prime Minister Nawaz Sharif would be soon forming a business advisory council comprising leading figures from different sectors. The prime minister would meet this advisory council every quarter along with his team of ministers and bureaucrats concerned.

As Pakistan’s exports fell short of target due to the decreasing global trend in prices of commodities like cotton. He would extend any help to rescue the textile industry that was operating at 70 percent of its capacity.

They also aim to address the basic challenges the textile industry is facing such as energy crisis, law and order, and imposition of taxes on industrial exports which has created a negative impact on the competitiveness of the textile industry and exports as they would like to double textile exports from $13bn to $26bn.

Commerce Ministry is also in talks with Turkey, China, South Korea, Thailand and Japan to sign free trade agreements (FTAs) to resolve the high tariff issue concerning Pakistan’s textile exports. The government would ensure that all FTAs are in the interest of Pakistani businesses.