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PTEA urges for withdrawal of protective & customs duties
30 Nov '11
3 min read
Pakistan Textile Exporters Association (PTEA) has urged the Government to roll back the protective and customs duties on raw inputs for domestic textile industry and also to allow drawback of local taxes and customs rebate on raw materials to help the textile producers in the country to cut down on their production cost and to boost their global competitiveness.
PTEA Chairman Rana Arif Tauseef said the unavailability of duty drawback on filament yarn and levy of protective duty and customs duty of about eight percent on domestically produced inputs meant for use in production of exportable textiles are adversely affecting the country's textile exports.
He contended that textile exporters in Pakistan do not enjoy an equal level playing field with their other counterparts in the region, as the inputs and raw materials that they use in production are priced higher than those in other countries of the region, due to which their production cost rises, thus rendering their produce unviable in the global market.
He further stated that their regional competitors in China, Sri Lanka and India get raw inputs at a lower price, and hence their cost of production also remains low, which enables them to sell their produce to global buyers at a comparatively lesser price.
In this era of intense competition after globalization and liberalization, exporters need to reduce their cost of production to bare minimum to survive and grow, Mr. Tauseef said.
Governments of majority of other exporting countries aid their exporters by providing duty, levy and tax reliefs and by zero-rating their cost of production. For example, India provides refund of protective duties to its exporters, while China provides low-cost inputs, he added.
It is not just raw materials, but the cost of inputs that go in production of exportable textiles are also significantly low in these countries as compared to Pakistan, which allow the exporters in these countries to offer their produce to overseas buyers at highly competitive prices.
As against this, textile exporters in Pakistan are heavily loaded with protective duties and levies, which is beneficial to raw material importers and domestic producers of inputs like filament yarn and manufacturers of chemicals.
Such imposition of duties and levies shoot up the cost of production at the very outset and the high cost of power in the country further adds to this.
All these factors have led to a vertical rise in Pakistan's cost of production and rendered the textiles produced in the country uncompetitive in international market, the PTEA Chairman added.
PTEA Chairman Rana Arif Tauseef said the unavailability of duty drawback on filament yarn and levy of protective duty and customs duty of about eight percent on domestically produced inputs meant for use in production of exportable textiles are adversely affecting the country's textile exports.
He contended that textile exporters in Pakistan do not enjoy an equal level playing field with their other counterparts in the region, as the inputs and raw materials that they use in production are priced higher than those in other countries of the region, due to which their production cost rises, thus rendering their produce unviable in the global market.
He further stated that their regional competitors in China, Sri Lanka and India get raw inputs at a lower price, and hence their cost of production also remains low, which enables them to sell their produce to global buyers at a comparatively lesser price.
In this era of intense competition after globalization and liberalization, exporters need to reduce their cost of production to bare minimum to survive and grow, Mr. Tauseef said.
Governments of majority of other exporting countries aid their exporters by providing duty, levy and tax reliefs and by zero-rating their cost of production. For example, India provides refund of protective duties to its exporters, while China provides low-cost inputs, he added.
It is not just raw materials, but the cost of inputs that go in production of exportable textiles are also significantly low in these countries as compared to Pakistan, which allow the exporters in these countries to offer their produce to overseas buyers at highly competitive prices.
As against this, textile exporters in Pakistan are heavily loaded with protective duties and levies, which is beneficial to raw material importers and domestic producers of inputs like filament yarn and manufacturers of chemicals.
Such imposition of duties and levies shoot up the cost of production at the very outset and the high cost of power in the country further adds to this.
All these factors have led to a vertical rise in Pakistan's cost of production and rendered the textiles produced in the country uncompetitive in international market, the PTEA Chairman added.
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