All Pakistan Textile Mills Association (APTMA) Chairman Tariq Saud has urged the government to wake up from its slumber and save the textile industry in order to ensure economic growth of the country.
He said the availability of 24/7 energy to the industry would only be useful when viability of the industry is restored. He condemned the indifferent attitude towards the prevailing state of affairs of the textile industry, which is a mainstay of the Pakistan economy with backward and forward linkages and is the biggest employer and export earner in the country. He further said that if this unfriendly attitude of the government continues then the industry will reach a point of no return.
He said the financials of the listed companies in the textile sector for the first 9 months of the current fiscal year suggest that the industry is heavily under pressure.
“Only 30 per cent of the listed companies of the textile industry are performing marginally better while the remaining 70 per cent of companies are showing negative results or have closed,” he said.
He said the financials of the non-listed textile companies are even worse and the exports of the sector are showing negative trends over the last two years, which the APTMA has been putting on record time and again. Unprecedented cotton crop failure caused 35% drop in production this year, he said.
“The textile industry has been left unattended and no responsible figure is there in the Textile Ministry to look after its issues and problems,” he said, and added, “No one takes responsibility in the government and there is no clue as to what is in the offing for the industry in the upcoming budget.”
He pointed out that the remaining part of the textile industry package has yet to see the light of day, as most of the decisions are lying pending despite a firm assurance by the prime minister.
“The prime minister assured to introduce a rating regime for the industry ensuring No Tax No Refund for the entire textile value chain and to tax only the domestic consumption of the finished textile fabrics and garments.”
Similarly, he added, the inputs and outputs of the entire textile supply chain should be zero rated. He said there are apprehensions about increased input tax and further increases in tax after reports in media. This will further add to the cost of doing business and make it impossible to operate.
He warned that any increase in the input tax on the textile value chain would prove the last straw on the industry’s back.
“The industry will reject any such move if introduced in the budget,” he said.
While listing down already pending issues of the industry, Chairman APTMA said the government has not yet released pending refunds of Sales Tax. 5 percent DLTL against exports of the entire textile chain including yarn. The theft surcharge and GIDC levied on the textile industry not yet withdrawn.
He said the input cost of cotton farmers should be reduced to encourage cotton production. Also, the funding provided by the textile industry for cotton research should be spent prudently on cotton seed technology.
He said the whole textile value chain should be zero rated in the budget as over 80 per cent of all fibers consumed are exported in one form or the other.
He also demanded immediate withdrawal of sales and import duty on cotton import.
