[ Textile Policy schemes: government releases Rs 1.34 billion ]
[ 900 textile products to be benefited by GSP+ status: Baig ]
[ Ministry yet to notify GSP+ Facilitation body ]
[ Pak-EU business forum announced ]
[ Govt finalises SRO withdrawal plan ]
[ FCCI for uninterrupted gas, power supply ]
Textile Policy schemes: government releases Rs 1.34 billion [ top ]
Business Recorder, December 28, 2013
The government has released Rs 1.34 billion announced for different schemes and incentives in Textile Policy (2009-14), informed sources told Business Recorder. The amount was released against Drawbacks on Local Taxes and Levies (DLTL), Export Financing Scheme and Markup Rates, sources said. This was the first release in the current year, where the government has earmarked Rs 7.5 billion in Budget 2013-14 for implementation of different initiatives pertaining to Textile Policy.
No amount was released in the first quarter of the current fiscal year to the Textile Division. Textile Policy, announced in 2009 envisaging $25 billion exports, is going to expire next year. However, the policy failed to achieve the desired results due to multiple reasons, including government''s inability to implement the policy in letter and spirit, lack of power/gas and the global perception about the country''s low production capacity, sources maintained.
They revealed that due to meagre allocation by the government during last four years, most of the initiatives announced in the Textile Policy have not been implemented. Due to inadequate funds, some key policy initiatives have yet to be launched, which are not only causing resentment among the industrialists following huge pending liabilities under operationalised schemes, but is hampering projects'' execution and their timely completion.
The government has earmarked Rs 7.5 billion against the demand of Rs 30 billion for implementation of different initiatives of Textile Policy in the budget for 2013-14. Besides, the government has approved grant of Rs 363 million under the head of demands for grants and appropriation to meet current expenditure in next fiscal year. Due to financial constraints, textile sector''s pending liabilities against the government under different schemes announced in the policy have swelled to over Rs 14 billion. This included Rs 10 billion as DLTL, causing resentment among the industry.
900 textile products to be benefited by GSP+ status: Baig [ top ]
Business Recorder, December 28, 2013
Out of more than 6000 products falling under duty-free access to the EU markets under the GSP plus scheme, about 900 are textile products, said Dr Mirza Ikhtiar Baig, Chairman Pakistan Denim Manufacturers & Exporters Association (PDMEA). He was speaking at a gathering in honour of Governor Punjab Chaudhry Muhammad Sarwar for the historic achievement of getting GSP Plus status from EU. The Textile exports are estimated to be enhanced by about US $1 billion per annum.
He said the Governor Punjab was truly instrumental in getting this facility for Pakistan. He said the PDMEA is a representative body of all denim manufacturers and exporters of Pakistan producing about more than 600 million meters denim fabric per annum. Our denim fabric is about 65 percent of the total cotton fabric production, he said and added that Pakistan denim industry is the fastest growing industry and has become 3rd largest producer of denim fabric in the world after China and India. Pakistan is called Denim Hub in the world, he said proudly.
The present export of denim fabric and denim garments is about $2 billion with the investment of Rs 50 billion ie $5 billion, consuming 30 percent of cotton crop. The industry is manufacturing all world renowned brands like Levi's, Mango, Next, Jordache, Gap, Diesel, Zara, Marks & Spenser, H&M, etc. An impressive journey which was only started 15 years ago, he added.
He has also congratulate Prime Minister of Pakistan Nawaz Sharif for using Governor Punjab's old contacts with EU Parliamentarians as British Member Parliament wisely. He appreciates Prime Minister's timely decision of transferring additional 85 Million MMCFD gas to the industries from power sector. It may cause some extra load shedding but the industry will remain operational and would build up confidence of our exporters to take additional orders from EU to earn valuable foreign exchange for the country.
Ministry yet to notify GSP+ Facilitation body [ top ]
Business Recorder, December 25, 2013
The Ministry of Commerce & Textile Industry has yet to notify the ''GSP+ Facilitation Committee'' to ensure smooth export to EU countries despite the fact the new scheme would become operational from January 2014. Sources revealed to Business Recorder that after consultation with all stakeholders, the Ministry had decided to set up a GSP+ Facilitation Committee for removal of regulatory bottlenecks related to Customs, ANF, FBR, SBP, Labour Departments, etc.
However, delay in constitution of the committee may hamper the prospects of the scheme as after one week the scheme would become operational. Stakeholders are waiting for early notification of the GSP+ Facilitation Committee. Officials'' sources revealed textile division and stakeholders had proposed to the government to bring back textile sector to zero rating while all their drawbacks amount held by the government should be immediately cleared to fully reap the benefits of GSP+ scheme.
It has also been decided that the data of the Pakistan Revenue Automation Limited (PRAL) would be shared by FBR and Textile Division to monitor exports on a daily basis under the GSP plus status. Textile Division would move a request to the FBR on urgent basis. The meeting also decided the role of Associations in attestation of ''Certificates of Origin'' for collection of shipment data on daily basis. It has also been decided that a new SRO be drafted, or amendments be made in SROs 492 & 410, so that the import of fabrics and materials would be allowed for re-export of value-added exports along with product diversification.
Pak-EU business forum announced [ top ]
DAWN, December 28, 2013
KARACHI: Governor Punjab Chaudhry Muhammad Sarwar on Friday announced the formation of Pakistan-EU Business Forum, a move that is aimed at reaping maximum benefits from GSP Plus.
Speaking at a luncheon meeting held at the All Pakistan Textile Mills Association (Aptma), the governor spoke about difficulties faced in convincing member countries of European Union to vote in favour of Pakistan on GSP Plus.
He further stressed that Pakistani industry must prepare for compliance of 27 UN conventions necessary to reap benefits from the GSP Plus.
Earlier, Aptma Chairman Yasin Siddik pledged to double Pakistan’s textile exports from current $13 billion to $26bn in the next five years.
He said that Aptma has undertaken a number of initiatives to keep the textile industry at par with global standards and expectations in respect of sustainability, corporate social responsibility, gender balance, etc.
Textile exports were $14bn in the year 2010-11 but dropped to $13.1bn in 2012-13, he said. He attributed stagnation in the industry to a variety of factors that include infrastructure deficiencies and limited market.
Aptma foresees new investment of $1bn and creation of one million direct and indirect jobs annually in years ahead which is expected to boost GDP growth by 1 to 2 per cent and a doubling of the cotton crop from 13 to 26m bales.
“The EU’s duty free access status to Pakistan has opened the door to balance our trade deficit if the government ensures steady supply of raw material and uninterrupted energy,” he noted.
Availability of cheap financing, say at 3 per cent, would help to initiate captive power generation on appreciable scale and the government needs to make such an option available, he said.
He urged to improve the per acre yield of cotton to increase production from 13 million bales to 26 million by improving seed quality and developing remedy for cotton leaf curl virus, white fly and mealy bugs.
Govt finalises SRO withdrawal plan [ top ]
DAWN, December 28, 2013
ISLAMABAD: The government is likely to announce next week a plan for fiscal adjustments including gas levy on all sectors except domestic consumers and a road map for withdrawal of tax exemptions starting in April 2014. Total impact is estimated at about Rs125 billion or 0.5 per cent of GDP for current fiscal.
As part of the plan, the government’s economic team led by Finance Minister Ishaq Dar on Friday decided to present to the prime minister on December 30 for approval a list of tax exemptions it planned to start withdrawing from April 1, 2014 to raise more revenue.
A senior official told Dawn that the government is required under the International Monetary Fund (IMF) programme to announce by December 31 a detailed three-year road map for withdrawal of discretionary statutory regulatory orders (SRO) introduced in the taxation system since 1932 in a phased manner.
“Except for tax exemption on the income of the State Bank of Pakistan, import of crude oil and major products like furnace oil, unpacked essential kitchen items and life saving drugs, everything under the sun would come under tax net at the conclusion of financial year 2015-16 on June 30, 2016,” he said.
He said the SRO elimination programme was to be implemented over the next two years but it has been brought forward by a quarter because of expected shortfall in budgeted revenue target of Rs2.475 trillion and higher than anticipated expenditures. Under the entire programme period, the SRO’s worth Rs400bn will be withdrawn in three years.
The official said the prime minister would be given a comprehensive briefing on Monday on the latest economic situation and steps to be taken to meet commitments made with the IMF for approval.
These would include imposition of a gas levy worth Rs100 billion or 0.4 per cent of GDP on all categories excluding domestic consumers with effect from January 1 and withdrawal of tax exemptions under SRO with effect from April 1, 2014.
Chairman Federal Board of Revenue Tariq Bajwa apprised the finance minister on the efforts being made by FBR to achieve the revenue targets set in the budget…and a plan being prepared for withdrawal of SROs,” an official statement said. During the meeting a threadbare discussion was held on the existing SROs issued for concessions in Income Tax, Customs and Sales Tax.
The finance minister gave ‘broad guidelines’ to the FBR for finalisation of SRO withdrawal plan. The meeting was also attended by secretaries of finance and commerce and top brass of FBR and National Tariff Commission.
Under a commitment given to the IMF, the authorities envisage measures yielding about 0.75 per cent of GDP in each of the subsequent years over the next two years.
“The focus will be on eliminating exemptions and concessions embedded in the SROs and in the law, as well as on eliminating the power of the executive to grant preferential tax treatment through SROs. These steps will facilitate gradually moving the GST to a full-fledged integrated VAT-style modern indirect tax system with few exemptions and to an integrated income tax by 2016-17”.
The sales tax exemptions at present are estimated to have a revenue impact of more than Rs240bn besides over Rs150bn on account of customs duty exemptions besides other areas like income tax etc.
FCCI for uninterrupted gas, power supply [ top ]
The News International, December 27, 2013
FAISALABAD: Faisalabad Chamber of Commerce and Industry (FCCI) president Sohail Bin Rashid has said that the industries, particularly the textile sector, should be prioritised next to domestic consumers in supply of electricity and gas due to its importance. He said that the textile sector was the largest contributor to the national exports and employment provider in the country.
He said that the textile sector needed to be accorded priority in supply of electricity and gas after domestic consumers so that export orders might be completed on time. He lauded the efforts of the government due to which the GSP Plus status had been accorded by the European Union from January 2014.
He, however, said that uninterrupted supply of gas and electricity was essential to take benefit of the facility. He appreciated the decision of the government to provide gas to the industries and said that the industries were currently facing eight hours loadshedding daily due to shortfall in electricity generation.