Page 9 - April-May-2018

08 09
A Lapse in Budgetary Reforms

Textile Sector neglected in Budget 2018-19 News

Textile sector voiced their discontent with the textile Mr. Jawed Bilwani, leader of Pakistan Apparel
budget 2018-19. Stakeholders are concerned about Sector stressed that the government should release
export oriented sectors of textile as the budget is long withheld refunds of approximately Rs.200
not as per their expectations. The budget should billion for a major breakthrough and unsurpassed
have been prepared focusing on the scenario of the exports, otherwise, the situation is already heading
declining textile exports that are constantly falling. towards alarming scenario. He also mentioned that
Several amendments in the budget would be the trade deficit had reached approximately USD 33
required by the National Assembly to improve billion, the highest in the 70-year history of the
growth rate of textile. country. “They should have done something for
exports. They did not utter a word for an increase in
By the start of April, in the budgetary proposal, the exports,” Bilwani said.
APTMA had emphasized on relevant measures that
can help achieve sustainable growth. APTMA Textiles industrialists are concerned that Textiles
suggested that the government should focus on a were kept among the zero rated sectors but it
tripartite strategy which included availability of should have been done through legislation. They
electricity and gas at affordable cost of Rs.7/Kwh also fear, in case of shortfall, sales tax will again be
and Rs.600/MMBtu from Rs.11.40/kwh and collected from the textile sector.
Rs.1300/MMBtu respectively, since it plays an
important role in reducing cost of doing business. It Mr. Gohar Ejaz, Senior APTMA group leader
was further suggested to remove custom duty for expressing his dismay over the budget said, “It is a
the local manufacturers to be able to import coal to disappointing budget for the textile industry. The
generate energy. It was also indicated that FBR government has neither announced any policy
needs to systemize an upfront automated payment measures on energy pricing nor has it continued
by allocating funds in the budget for the State Bank the export package. How is the government
of Pakistan for duty drawback as well as refund of planning to meet the current account deficit when it
sales tax and income tax to resolve liquidity crisis of has discontinued the current policy, which resulted
manufacturers. Also, the Long-Term Financing in a 10 percent growth last year after four years of
Facility (LTFF) should be available to indirect export continuous fall?”
manufacturers as well to encourage the value-
chain for producing Textile goods meant for export. Pakistan’s share in global exports has fallen to 0.13
percent hence; exports should have been a primary
The State Minister Mr. Akram Ansari termed the focus of the budget. Proper implementation of the
2018-19 budget people friendly; but the textile budget and incentives can be very beneficial but the
stakeholders have expressed disappointment with resources are hardly utilized to their full potential.
the budget unveiling.
Although major dissatisfaction was expressed by
Mr. Ijaz Khokhar, chief coordinator Pakistan industry but some positive steps were taken to
Readymade Garments Manufacturers and facilitate trade and industry like reduction in tax
Exporters Association (PRGMEA) said, “We are slabs, restriction in power of tax collectors
exporters and nothing was announced for exports. regressing back to Federal government, reduced
custom duties on certain items, rationalization and
Only the previously announced Rs.180 billion Prime reduction of tax rates for individuals, AOPs and
Minister’s package was mentioned again and companies, removal of regulatory duty on important
again, there was no direct relief for the textile sector raw materials, increase in development budget,
and exporters.” He also added that the exporters allocations for agriculture cotton sectors,
had no idea when they would be given their continuation of LTFF and Export Refinance Facility
previous refunds. at lower rates for textile sector is appreciable.

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