Chairman All Pakistan Textile Mills Association (APTMA) North, Hamid Zaman has urged the government to take stakeholders into confidence before notifying new timing for retail business.
He expressed concerns that issuance of any such notification without consultation between stakeholders and the government, retail sales in the country would plummet and ultimately reduce demand for locally produced textiles and other products.
He was addressing a press conference on Tuesday. Mr. Asad Shafi, Vice Chairman APTMA, Mr. S.M. Nabeel, Senior Executive, APTMA, Mr. Tariq Rana, Chainstore Association of Pakistan (CAP), Mr. Shehryar Bux, Chairman Pakistan Retail Business Council Mr. Ahmed Hussain, and owners of leading brands besides Secretary General, APTMA Mr. Raza Baqir were also present on the occasion.
Chairman APTMA said thousands of branded retail outlets operate in major markets and shopping malls of the country. Outlets owned by members of APTMA, Chainstore Association of Pakistan (CAP), and Retail Business Council are fully tax-compliant “Tier-1 retailers”. They are duly integrated with the FBR-POS system and contribute greatly to the formal economy of the Country. Retail employees constitute 14% of the total workforce with over 10 million people directly or indirectly working in shopping malls, manufacturing, service providing, cottage industry, etc., he added. According to him, the early closure of shops will have a serious negative impact on GDP, employment, and tax collection and lead to the closure of factories.
Speaking on the occasion, Vice Chairman Mr. Asad Shafi said the importance of retail business could be assessed from the fact that the retail sector comprises over 18% of Pakistan’s $376 billion GDP, or $64 billion of total GDP. He said the organized retailers pay up to 17% GST and 35% income tax, operate at a commercial tariff of Rs70 per unit (the highest in the country), and do not receive subsidies. Also, he said, the domestic retail sector plays a crucial role in supporting the textile export industry during a time of global recession, and curtailment in retail hours could result in more factory closures and significant economic losses for the country.
Asad pointed out that 8 to 10 PM are considered to be as peak hours for retail sales, as many consumers typically go for shopping after work around 7 PM, especially when all other workplaces will continue to operate on normal timings. Reduced timing may curtail sales by 30%, costing $15 billion or Rs3.5 trillion in economic activity, he apprehended, saying that it would erode hundreds of billions in sales tax and income tax collection, for a mere annual electricity savings of Rs62 billion.
Chairman CPA Tariq Rana said early closure could result in job losses for 3-4 million people, or 35% of the workforce. The retail sector provides value-added employment and absorbs 14% of the national workforce, with 10 million people employed in two shifts.
He said Over 40% of annual retail sales occur during the 30 days of the Holy month of Ramadan, and early closure during this period would lead to a collapse of annual sales and tax revenues.
According to him, major malls and organized retailers already use energy-efficient lighting and cooling technologies for cost-effective energy usage. Wholesale and retail outlets in rural areas already close by 8 PM, and this restriction will impact retailers operating in urban and semi-urban areas, particularly organized tax-paying businesses, he said.
The APTMA leadership has urged the government to implement daylight saving timings across the country to save approximately 1% of the annual energy costs, which translates to USD 230 million of the total fuel import bill of USD 23 Billion. Also, they said, the government should fix the retail sector closing time to 10 PM for the whole year (excluding festivals), with a 30% voluntary reduction in their electricity consumption during operating hours. The organized retailers shall voluntarily run cost-saving energy conservation campaigns through their massive social media reach, they added. They said the provincial government should hold meaningful consultations with APTMA, CAP and other stakeholders to evolve a mutually agreed solution.
