The Pakistani Government’s proposal to withdraw zero-rating regime would have an adverse impact on export-oriented production and deter both local and foreign investment in the sector, according to chairman of the All Pakistan Textile Mills Association (APTMA) Syed Ali Ahsan, who said chances of closure of many units are high under this situation. He said the industry is seriously concerned over the move as exporters would be the worst hit due to stuck-up refunds. He said the proposed scheme to raise revenue from the textile value chain by introducing 17 per cent sales tax and subsequent refund of the same under an already tested, tried and eventually failed system would choke down the entire industry value chain and exports due to liquidity constraints. The industry cannot afford to obtain funds at an exorbitant interest rate hovering around 15 to 17 per cent and pay input tax and then wait for its refund, Pakistani media reports quoted him as saying.
Source – Fibre2Fashion.
