Lahore, April 16, 2018 (PPI-OT): The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), in its Budget proposals for 2018-19 submitted to the federal budget makers, has called for Ease of Doing Business, lowering Cost of Production, solution of liquidity crunch through early refunds payment, equal energy tariff across the country and relaxed import policy for industrial raw material so that industrialization can be promoted and exports can be enhanced.
PRGMEA senior vice chairman Sheikh Luqman Amin observed that Pakistan’s global ranking of doing business is at 147 out of around 190 countries mainly due to bureaucratic hurdles, as more than 20 different departments of the government, which should have facilitated the manufacturers for their great contribution in job creations, are discouraging the exporters.
He said that various provincial departments including EOBI, Social Security, Women Welfare, Environment Department etc. are playing negative role and treating the manufacturers and exporters like a criminal, instead of facilitating them. “It is our request to deduct a reasonable percentage from the realized amount to give an easy way to the exporters to cope with this critical situation and to focus on the marketing and increase of export. We request for easy process in the contribution of EOBI, Social Security etc.,” the PRGMEA proposals suggested.
He said that Pakistan’s core issue is the cost of doing business which has slid down to a level where our industry is no longer competitive. The government should diligently work on bringing around significant improvements in ease and cost of doing business for the export industry. He said that all stuck-up claims of the exporters (DLTL, DDT, Customs Rebates, Sales Tax rebates, etc.) should be released. The liquidity crunch is a major stumbling block in the way of improving exports.
In budget proposals, the PRGMEA senior vice chairman asked the government to work on a fast track plan to address energy issues. Priority should be given to the export oriented garments sector, which is the highest value-added link in the entire textile value chain. Gas price disparity among provinces is source of concern for the textile industry.
Requesting the Duty Free Import of G 3 and G 4 type fabric for re-export of Garments, he said that government should introduce the liberal import policy for raw materials for re-export like duty-free import of fabrics and accessories which are not being manufactured in Pakistan. We request that import of fabric to be allowed under the simple and easy procedure instead of DTRE, which is very complicated and only 2% exporter can avail importation under DTRE facility.
Sheikh Luqman said that Rupee depreciation versus the dollar has no connection with cotton Yarn prices, but the unprecedented surge in cotton yarn rates has hit the export-oriented value added textile sector adversely. PRGMEA has appealed for duty-free yarn import to encourage value addition, reduce cost of doing business and bridge the gap between production and consumption.
He said that the unfriendly policies were hindering exports of the country adversely. The government should review its Textile Policy in order to remove hurdles hindering exports and to enable the textile sector to attain the targets. PRGMEA proposed that if we really want to promote the exports and solve the problems of liquidity crunch in the country government should introduce back to back LC system in Pakistan on the pattern of Bangladesh.
Rejecting SBP procedure for the new schemes of PM Package, he asked the State Bank not do any discrimination in the small cities of Pakistan in the disbursement of the funds. He said high interest rates are also an impediment to private sector borrowing from commercial banks. PRGMEA proposes that special lending rates should be given to the garment sector.
He suggested that all existing loans included (part 1 and 2) should be on zero markup with allocation on total export performance. The banks should facilitate businesses through lending money on easy terms and conditions. PRGMEA urged the government to continue the sales tax zero-rating facility to five export-oriented sectors in the upcoming federal budget 2018-19 to revive industrial viability. It is suggested that the zero-rating should be extended to packing material as well.
For more information, contact:
Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA)
3rd Floor, Plot No. 57-C, 24th Commercial Street,
Phase II (Ext), DHA, Karachi, Pakistan
Tel: +92-21-35890651-2
Fax: +92-21-35890653
Email: info@prgmea.org
Website: www.prgmea.org