The Pakistani Government last week withdrew sales tax and customs duty on cotton imports with effect from January 8 to meet the shortfall of silver fibre, a key input in the country’s textile industry. The Economic Coordination Committee (ECC) of the cabinet approved a proposal regarding the same at a meeting headed by Prime Minister Shahid Khaqan Abbasi.
The textile sector, which contributes more than 60% of the country’s total exports of $20 billion, had been demanding the abolition of 4% customs duty and 5 %sales tax since last year to promote value addition. The ECC meeting also approved financing plan for 1.2 billion cubic feet/day capacity of re-gasified liquefied natural gas (RLNG-III) pipeline project from Karachi to Lahore, according to the reports presented by media.
The country set up its first RLNG plant back in 2015 with a production capacity of about 600 million metric cubic feet/day (mmcfd), and another with the same capacity was added recently to reduce the gap between demand and supply of around 2 billion cubic feet per day.
Despite being the world’s fourth largest cotton producer, Pakistan relies on import of cotton to meet local demand, which is estimated at 15 to 16 million tons per year. Cotton production is expected to be around 11.1 million bales of 170kg each during the 2017-18 crop year.