Page 9 - May-June-2020

09
Textile export industry News

thinks that new budget

would lead to liquidity and

industrial crunch

It is saddening to see that there is no relief for textile view that if Government cannot give something to
industry, the situation would worsen amid liquidity exporters, it should not also take away their precious
crunch and global business shrinking, will lead to liquidity of which are arranged to run industries as the
closure of industries, decline in exports and massive government would not be able to refund back due to
unemployment. huge and increasing budget deficit.

These views were expressed by Chaudhry Salamat Exporters demand the government to reconsider
Ali, Pakistan Hosiery Manufacturers and Exporters restoring zero-rating or slash down the percentage of
Association (PHMA) Central Chairman in a GST from 17 percent to 4 percent.
post-budget statement to press and media.
The textile export industry will face additional
Salamat Ali said the value-added textile export challenge due to global 40 to 50 percent recession,
industry has strongly rejected the federal budget where price war would be the name of game which
2020-21 terming it one-sided and unrealistic without will cause exorbitant increase in the cost of manufac-
any relief for Textile Industry which is the backbone of turing, which cannot be afforded by SME exporters
the economy and exports, most labour-intensive and such situation may compel for closure.
sector, also provide huge employment to the female
workers and particularly to the lower class in the Several of export industries have been closed due to
Garment units and highest foreign exchange earner. liquidity shortage and after this unreasonable and
unrealistic budget many exporters will also close their
Textile industry has been completely ignored and industries as they no more afford to run their indus-
deprived of relief in this budget which, purportedly, tries due to non-availability of liquidity. It is an irony
made on the directions of IMF. Imposition of 17 that during last budget, Government had imposed 17
percent Sales Tax in last budget has brought disas- percent sales tax over textile industry saying that they
trous effects on the textile industry and its exports by would bring domestic sector into the tax network, but
means of liquidity crunch resulted in shape of stuck Government has failed to do so as in the federal
up refunds worth billions of rupees. The top genuine budget 2020-21 it was not declared how much
demands to restore zero-rating and proposals of amount was collected from domestic sales and
textile export sector have been totally disregarded by whether the target was achieved? On the other hand,
the so-called financial managers of the govt who are more than 60 percent of exporters' precious liquidity
outwardly performing on the directions of IMF instead stuck with FBR in carry forward or deferred, appar-
of government. ently, due to non-availability of funds with the Govern-
ment. Already huge amount worth billions of Rupees
The value-added textile exporters have expressed is required to be paid to exports against their Sales
sheer disappointment and have demanded the Tax claims. If in next financial year, govt forcefully
government to review and restore zero-rating treating collects the 17 percent GST, it would not be able to
five export sector as lifeline for export and economy. payback to exporters due to huge budget as FBR
Exporters are not demanding any favour but of the has admittedly failed to achieve the revenue target.

May/June 2020
May/June 2020