JavaScript seems to be disabled in your browser.
You must have JavaScript enabled in your browser to utilize the functionality of this website.


News Clips 11 December, 2015

[ Textile package: inordinate delay hitting industrial sector: PRGMEA ]
[ SRO 1065(I)/2013: FBR clarifies tax incentive package ]
[ Merchandise exports dip 14pc ]
[ Exports slump continues amid delay in trade policy ]
[ Refund claims: textile exporters assured of payment ]

Textile package: inordinate delay hitting industrial sector: PRGMEA   [ top ]

Business Recorder, December 11, 2015 
The inordinate delay in announcement of much trumpeted textile package is further deteriorating the largest industrial sector of the country and biggest export earner; this was stated by acting Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Arshad Aziz. He said that he current scenario extremely worrying the precious foreign-exchange earning industries and the increasing cost of utilities and inputs is causing closure of many units across the country. 

He said that biggest foreign exchange earning sector of textiles that was touching almost 4 to 5 billion dollars before PPP regime now is dwindling and fallen to less than two billion dollars during current fiscal year. He said that it's a shame that countries like Bangladesh have brought to its garments exports to over $15 billion. Similarly some other competitors like Sri Lanka, Vietnam, and India have increased their garments exports to even more than Bangladesh. 

Textile Package delay has created further unemployment and closure of many units, which could not survive due to funds stuck up in refunds and no package announced to compete with the competitor countries which have given incentives to the exporters to increase their export", Arshad said adding that we were given GSP plus facility by the European Union but due to stuck up capital with the govt to the tune of billions rupees rendered us unable to exploit this opportunity. "Unfortunately we are unable to increase our exports nor able to sustain but in fact we have lost our market share to the competitors. Many units, which could not survive due to stuck up funds in refunds and no package announced to compete with the rival countries. 

SRO 1065(I)/2013: FBR clarifies tax incentive package   [ top ]

Business Recorder, December 11, 2015 
The Federal Board of Revenue (FBR) has clarified that the source of investment shall not be probed under SRO1065(I)/2013 by the tax authorities, for existing and new undertakings, if investment is made on or after January 1, 2014, and commercial production commences on or before June 30, 2016. In this regard, the FBR Thursday issued an income tax clarification for clause 86 of Part-II of Second Schedule of the Income Tax Ordinance inserted through SRO.1065(I)/2013 dated December 20, 2013. 

According to the FBR, clause (86)(a)(iii) of Part IV of the Second Schedule to the Income Tax Ordinance, 2001 is applicable for both existing as well as new concerns subject to the conditions laid down in sub-clause (c) ibid, it added. Background of the issue revealed that the FBR had notified a multi-pronged tax incentive package in December 2013 for new investors under which the source of investment would not be asked if it is made on or after the 1st day of January, 2014, and commercial production commences on or before the 30th day of June, 2016 through an SRO 1065(I)/2013. 

The provisions of section 111 shall not apply to investment made by an individual in a Greenfield industrial undertaking directly or as an original allottee in the purchase of shares of a company establishing an industrial undertaking or capital contribution in an association of persons establishing an industrial undertaking; investment made by an association of persons in an industrial undertaking; and investment made by a company in an industrial undertaking; if the said investment is made on or after the 1st day of January, 2014, and commercial production commences on or before the 30th day of June, 2016. 

Under the notification, the source of investment shall not be probed by the tax authorities in respect of persons, who set up an industrial undertaking/expansion project on or after January 1, 2014. The concessions shall also apply to investment made in construction industry in corporate sector, low cost housing construction in the corporate sector, livestock development projects in the corporate sector, new captive power plants and mining and quarrying in Thar Coal Balochistan and Khyber Pakhtunkhawa. The concessions shall not apply to investment made in arms and ammunitions, explosives, fertilisers, sugar, cigarettes, aerated beverages, cement, textile spinning units, flour mills, vegetable ghee and cooking oil manufacturing. The term Greenfield industrial undertaking shall include expansion projects for the purpose of this clause. The immunity shall not be available to proceeds of crime relating to offences under Control of Narcotics Substances Act, 1997; Anti Terrorism Act, 1997 and Anti-Money Laundering Act, 2010, notification added. Responding to a query of a spinning and weaving mill of Karachi, the FBR clarified that clause (86)(a)(iii) of Part IV of the Second Schedule to the Income Tax Ordinance, 2001 is applicable for both existing as well as new concerns subject to the conditions laid down in sub-clause (c) ibid, it added. 

Merchandise exports dip 14pc   [ top ]

DAWN, December 11, 2015
ISLAMABAD: Merchandise exports dropped by 13.81 per cent to $8.541 billion during the first five months (July-Nov) of 2015-16 from $9.909bn in the same period last year, indicating dampened international demand.

In November 2015, the exports declined by 15.12pc to $1.662bn from $1.958bn in the same month last year, Pakistan Bureau of Statistics data showed on Thursday.

Analysts believed that the delay in trade policy, which was to be implemented from July 2015, was one of the reasons for declining exports.

Exporters think that the current government was not serious about dwindling exports. They said that the exports of value-added textile will decline further owing to government’s irrational policies. India has recently announced 3 to 5pc incentive to its exporters.

The decline in textile exports, which accounts for about 56pc of total exports, was mainly led by non-value added sector. While, the value-added sector, which witnessed growth in the first three months of 2015-16, also plunged in October and November due to the imposition of regulatory duty on imports of cotton yarn.

Meanwhile, imports also fell by 9.03pc to $18.477bn during July-Nov 2015-16 from $20.311bn in the same period last year. However, imports surged by 8.87pc year-on-year in November 2015. The trade deficit contracted by 4.48pc to $9.936bn from $10.402bn in July-Nov 2014-15. On a year-on-year basis, trade deficit stood 37.5pc higher in November 2015. 

Exports slump continues amid delay in trade policy   [ top ]

The Nation, December 11, 2015
ISLAMABAD - Pakistan’s exports tumbled by 14 per cent in five months (July-November) of the current fiscal year amid delay in the Strategic Trade Policy Framework which could devise strategy to enhance country’s exports. 

Country’s exports came down to $8. 

5 billion in July-November of the year 2015-2016 from $9. 

9 billion of the same period of previous year, showed the latest data of Pakistan Bureau of Statistics on Thursday. 

Pakistan’s exports are continuously declining from last several months. 

The Ministry of Commerce attributed the decline in exports to adverse terms of trade triggered by massive reduction in commodity prices and weak global demand. 



On the other hand, the government has yet to formulate the STPF, which was supposed to be implemented from July this year, as the previous policy expired on June 30. 

The Ministry of Commerce had claimed that they are awaiting the approval of the prime minister before its submission to the cabinet for formal approval. 

The private sector has pinned high hopes on the government to announce a policy to boost exports that had stagnated at $24 billion over the past three years. 

The experts believed that government could not enhance exports until resolving the issues of the exporters. 

The government should resolve exporters issues including tax refunds, high cost of energy, and tariff rationalization and private sector access to credit, besides providing power supply to the industries, said an economic expert while talking to The Nation. 

The Senate Standing Committee on Commerce on Thursday also showed concerns over the delay in the trade policy. 

Committee chairman Senator Shibli Faraz said that proposed policy is not based on facts. 

He summoned the Commerce Minister Khurram Dastgir Khan in its meeting for discussion on the proposed trade policy. 

“The government should take steps to boost the exports, which are continuously declining,” he added. 

In the proposed trade policy, the government has proposed to enhance the exports to $30 billion during ongoing financial year 2015-16, $35 billion in next fiscal year 2016-17 and $40 billion by the end of year 2017-18. 

The overall volume of the exports in STPF 2015-18 is estimated at $105 billion. 



Meanwhile, imports decreased by 9 percent to $18. 

5 billion in July-November 2015-2016 from $20. 

3 billion of the same period last year. 

Pakistan’s trade deficit, gap between exports and imports, narrowed to $9. 

9 billion during five months of the current financial year from $10. 

4 billion of the corresponding period of previous year with reduction of 4. 

15 percent. 





According to the PBS data, exports decreased by 3. 

9 per cent in the month of November 2015, as country exported goods worth $1. 

66 billion as against $1. 

72 billion of October 2015. 

Similarly, the imports went down by 0. 

23 per cent to $3. 

91 billion in November 2015 from $3. 

92 billion of October 2015. 





Therefore, trade imbalance was registered at $2. 

26 billion in November 2015 as against $2. 

2 billion of the October, showing an increase of 2. 

64 percent. 

Refund claims: textile exporters assured of payment   [ top ]

Business Recorder, December 9, 2015 
Member Inland Revenue, FBR Dr Muhammad Irshad has assured textile exporters for expeditious payments of outstanding refund claims. FBR will strive to facilitate the exporters being major stakeholders in precious forex earning. While addressing the textile exporters at Pakistan Textile Exporters Association (PTEA) on Tuesday, Member Inland Revenue said, "Textile exporters are playing key role in strengthening the economy and textile sector is the main stay of national economy. 

FBR is fully committed to solve the financial issues of exporters as it has become a major challenge that is not only adversely hurting the industrial activities but is also hindering the new investment." He instructed the regional authorities for speedy disposal of all deferred claims and expeditious processing of refund claims of under Section 66. 

He informed that regional tax authorities have already been directed to immediately constitute Advisory Councils comprising representative of exporters/business associations and tax officials to look in to the matters irritating exporters and business community and the necessary notification, in this regard will be issued within a week. 

On the issue of notices by the Punjab Revenue Authority, he informed that a meeting of all provincial revenue authorities with the FBR has been fixed on December 17, and the matter will be resolved amicably. Earlier, apprising Member IR of the problems confronting textile exporters, Asghar Ali, Chairman PTEA briefly enlightened the hurdles faced by textile exporters in refund regime. 

He requested for speedy deposal of regular claims and stressed for payment of claims under section 66 and deferred. Replying to a question raised by the Group Leader PTEA Ahmad Kamal regarding recovery on account of blacklisted suppliers, Member IR assured that the issue will be resolved through necessary amendment in the law. He instructed the regional FBR authorities to stop initiating any action against exporters for recovery of tax on account of blacklisted suppliers.