PRGMEA seeks concession to arrest falling exports

16 Jun '16
2 min read

Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has urged the government to develop a coherent plan that allows some kind of exemption/concession to the garment sector to arrest declining exports that fell 12.4 per cent to $19.155bn in the 11-month period (July-May) from $21.859bn a year ago.

Pointing towards the stiff competition offered by global rivals such as Vietnam and Bangladesh, Chairperson of PRGMEA, Sheikh Mohammad Shafiq sought immediate notification of the zero rated tax regime for five export sectors including value-added textile, carpet, surgical, sports goods and leather that was announced in the Budget earlier this month.

In a statement, Shafiq said, despite the budget announcement to this effect by Finance Minister, Mohammad Ishaq Dar, the Federal Board of Revenue (FBR) has not issued any notification for zero-rating of the above-mentioned export sectors.

As the result exporters were facing enormous technical difficulties in getting zero rating exemption because the custom authorities were not cooperating with them saying no order had been issued by FBR in this regard. Thus, a large number of export consignments had been withheld by exporters, Shafiq pointed out.

The PRGMEA chairman highlighted the plight of the country's RMG manufacturers and exporters vis-a-vis a main rival like Bangladesh. He said that low cost of labour in Bangladesh goes in favour of employers (exporters). While the minimum wage is around $68 in Bangladesh, in Pakistan it is $125 and rising. Additionally the lower utilities cost further benefits the manufacturer, he pointed out.

“On the other hand, Pakistan gives 4 per cent rebate on incremental basis while our competitors such as Bangladesh offer incentives on the whole. There should be some incentive for Pakistani exporters so that they can compete fairly with their rivals,” he said.

He also regretted that policies were not being implemented in true spirit. (SH)

Fibre2Fashion News Desk – India

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