pak-30pc textile industry in Punjab closed down

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July 07, 2015 LAHORE - At least 30 per cent textile industry in Punjab has been closed down, as the cost of doing business in the textile sector has skyrocketed and the burden of incidental taxes, provincial cess, system inefficiencies and the punitive withholding tax regime have added fuel to the fire. Government should provide level playing field to double its existing share in global textile trade.
APTMA Chairman SM Tanveer urged the government to restore the competitiveness of the industry by ensuring uninterrupted supply of gas and electricity at regionally affordable rates, liquidation of all pending refunds, removal of all innovative taxes and restoration of zero rating regimes for the whole textile chain.
SM Tanveer, talking to a select group of journalists, complained that the government had failed to bring the unorganized power looms and sizing sectors into the tax net and burdened the textile industry with a 0.6-percent tax on each transaction plus a five-percent sales tax. All these incidentals and punitive measures have hit the sustainability of the textile industry in Pakistan.
It is also an irony that the federal government has imposed a surcharge of Rs3.60 per unit to mitigate the positive impact of tariff reduction by the National Electric Power Regulatory Authority. The textile industry is unable to bear this burden despite operating on independent feeders with no line losses and theft and a 100 percent payment of bills.
He said that regional competitors are paying less than 10 cents against the 14.50 cent electricity tariff in Pakistan. Since the government is not ready to strengthen the viability of the textile industry by reducing the incidental taxes and the electricity tariff, it is the right time to lock up factory gates once and for all. The government should immediately declare the export industry zero rated and remove all surcharges, development cess and the sales tax.
Gohar Ejaz too was critical of the situation, saying textile millers in Sindh and Khyber Pakhtunkha are blaming the Punjab for their ironies and the textile millers in the Punjab are crying against the discrimination. The association leadership has recently averted a move by certain millers for a nation-wide strike. The industry is bearing a burden of Rs 175 billion, that is 12 percent of the turnover, in the shape of innovative taxes, energy tariff and a hostile attitude by the federal government towards the textile industry.


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