KARACHI: Exporters have urged the government to restore the zero rating of sales tax for the five export sectors as current refund payment system has failed to ensure timely payment of claims.
“Exporters are unable to fulfill their export commitments due to extreme liquidity crunch coupled with cash flow problems as government has failed to clear the pending refund claims to the tune of billions of rupees,” Pakistan Hosiery Manufacturers and Exporters Association (PHMA) said in a statement.
The statement said that despite this crisis, textile sector remained the most vibrant sector of the economy with its share of 60 percent in total exports of the country.
“Stuck refund claims (sales tax, income tax, duty drawback and textile policy incentives) and high priced energy inputs are adversely affecting the production, employment and exports,” PHMA said.
Exporters demanded of the federal government to honor the commitment and ensure swift payments to exporters against their refunds, within 72 hours after submission of sales tax refund claims.
“It was agreed between the government and textile sector that sales tax refund claims payments will be made immediately after submission of Goods Declaration on the pattern of Bangladesh model and in case the government fails to make swift payment to exporters viz new refund system in three months, the government will restore the zero rating of sales tax and no payment, no refund regime,” read the statement..