PBEA condemns GST on textiles

09 Jun '11

2 min read

A press release issued by the Pakistan Bedwear Exporters Association (PBEA) has termed the recently announced Budget for 2011-12 as a disappointment.

The press note stated that it is an accountant's budget which speaks about the sources from where the money can be raised by way of taxes to meet the expenses.

The discouraging portion of the budget is that it does not provide any strategic policies for industrialization, employment generation and exports. Also, no allocations have been made in the budget for rapidly waning infrastructure sector, the press release noted.

The five percent GST on purchases of textiles is regressive, particularly in view of huge volatility in yarn prices. However, slashing the sales tax rate from 17 percent to 16 percent, abolishing regulatory duty, and raising the minimum limit of taxable income would help in curbing inflation.

According to the Economic survey of Pakistan, last fiscal year's GDP stood at 2.4 percent, as against the target of 4.5 percent. The national budget deficit for the outgoing fiscal year is likely to be stable at 5.7 percent or Rs. 1.02 trillion, while the federal budget deficit is likely to remain at 6.3 percent or Rs. 1.14 trillion.

The only way to save the country from losing out to competition is to urgently implement decisive strategic policy decisions to intensify exports, hastening industrialisation and generating new jobs, while ensuring safe working environment, and sufficient availability of gas and power required for operating industries, the PBEA statement said.

All in all, the nation needs to address the following issues: a distressing fiscal deficit, excessive current account deficit, soaring oil prices, severe power shortages, high inflation and falling FDI numbers, the PBEA statement concluded.

Fibre2fashion News Desk - India

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