ISLAMABAD: The government will release Rs 8 billion in local tax and levy (DLTL) refunds from industries starting Friday (tomorrow) to help them overcome the cash shortage, a business adviser said on Wednesday.
Advisor to the Prime Minister of Trade and Investment Razak Dawood said the fund will be transferred from July 2. “I hope this will ease the cash flow problems of our exporting companies and boost their production,” Dawood wrote on Twitter.
The government allocated 20 billion rupees to the DLTL regime in the 2021/22 budget despite demand from textile exporters, who are the main applicants, to increase the allocation to at least 75 billion rupees to clear the backlog and the new duty drawback (DDT) / DLTL claims.
They said the central bank had not yet authorized Rs32 billion DLTL payments from exporters. Textile exports are forecast to rise 17% to pass $ 15.5 billion this fiscal year as the government began DLTL payments, they said.
Textile exports increased by 7.3 percent in 2010 and 35 percent in 2011 when the government then started disbursing DLTL in 2009, but they declined by around 11 percent in 2012 due to the withholding of DLTL payments, according to an estimate by the Pakistan Hosiery Manufacturers and Exporters Association (PHMA). .
Textile exporters said the tax rebate on exports of clothing, home textiles and fabrics should be granted at 7%, 6% and 5%, respectively, based on shipments for the next five years to compete on the international market while competing countries expand up to 16%. Additional DDT on a 10 percent increase in exports over the previous year is also expected to be provided at 2 percent. “This will lead to huge investments in the textile sector and will encourage new exporters to invest in the textile sector,” said PHMA.
The government needs to streamline and automate the DLTL / DDT disbursement system, which should be transferred electronically to exporters with export earnings.
Value-added textile exporters demanded duty-free importation of cotton yarn, the removal of five percent of tariffs on the import of 32 single and inferior yarns, and permission to import cotton from any country until the shortage of cotton yarn is controlled. The value-added textile export industry contributes around 62 percent of total exports, provides the most urban employment, especially for female labor, and supports around 40 related industries.
Textile exporters called the budget relatively better, but said it could not consider a no-pay-no-refund system, a reduction in withholding tax, and a suspension of the fund’s surcharge. export development.