LAHORE: The All Pakistan Textile Mills Association (Aptma) has sought government’s intervention in the tax regime for the revival of the industry.

In its budget proposals submitted to the FBR it has stressed the need for creating a stable environment with more market access to deal with competitiveness issues amid global economic meltdown.

Aptma in its proposals pointed out that the textile spinning and weaving industry was facing unprecedented crises since July 2006. Consequently, sizeable textile capacity had been severely impaired. Textile exports in quantity and value terms had declined all across the value chain by 30-40 per cent compared with exports made in 2006-07.

It said that one major factor behind the declining trend was the erosion of textile industry’s competitiveness, particularly against the huge incentives being provided by the competing countries like China, India and Bangladesh to the industry and exporters.

Aptma has sought favourable actions from the government on existing tax structure, particularly of income tax, customs duty and sales tax.

It has urged the FBR that all textile machinery, raw materials, spares and chemicals should be exempted from the one per cent withholding tax at import stage.

Similarly, the abolition of minimum tax should be continued and maximum corporate tax should be reduced to 25 per cent to attract foreign investment in the sector.

In the context of prevailing shortage of polyester staple fibre (PSF) and its high cost compared to international competitors, Aptma proposed that the customs duty of 4.5 per cent on PSF on the import stage should be reduced for local consumers.

Furthermore, duty levied on other Man Made Fibres (MMF) like viscose, acrylic fibre etc should also be withdrawn in the next budget.

Similarly, the DTRE policy on PSF imports by the exporters-cum- manufacturers should be continued. A provision should immediately be made as a temporary contingency measure for import of 10,000 tons of PSF per month free from import and anti-dumping duties.

It has further proposed that zero rating of sales tax for textiles should be continued as over 85 per cent of cotton and MMF consumed in the textile value chain are exported in one form or the other.

Regarding pending sales tax refunds, Aptma demands immediate sanction of outstanding refunds to the extent of one per cent of the turnover value.

It urged the government to allow duty drawback on yarn at the rate of 3-5 per cent and grey fabrics at 4.5 per cent of the turnover value and to the downstream sector on cascading basis.

By Our Reporter

Source: www.dawn.com