Different segments of the value-added textile sector have criticised the government for providing relief only to the spinning and weaving industry and demanded immediate announcement of incentives to help them prop up falling exports and compete with regional peers.Leaders of different segments of the sector agreed that the government was not fair to the industry which contributed up to 80 per cent in exports. The sector also opposes regulatory duty on import of cotton yarn which, they say, will increase their cost of production by three to four per cent and make them uncompetitive on the world markets. Even incentives like reduction in long-term finance (LTF) and export refinance only supported the spinning sector because the value-added sector was mostly operated by small and medium enterprises, they argued. Exports cannot go up if huge refunds towards duty drawback and sales tax remained stuck up with the Federal Board of Revenue (FBR), lamented the leaders of eight value-added segments. The industry has almost always asked for relief on energy pricing and taxation, whether through zero rating of exports or the more expeditious handling of refunds. And in every case, the government has found that the divisions between the spinning sector and the broad swath referred to as the ‘value-added sector’ have pulled it in opposite directions. The same story is repeating itself again today, as calls for a textile rescue package mount. Industry representatives are disappointed they will have to wait a little longer to hear back from the government on energy pricing, which is difficult to reduce given the constraints on the fiscal framework. Not many in the industry have the option to avail themselves of the benefits of the DTRE scheme, they argue, meaning the duty exemptions available will only be accessed by very few. Their arguments are sound, and supported by available data.The measures adopted by the government are more likely to benefit the spinning sector at the cost of the value-added one. Although the result might be a slight increase in exports, the quality of that increase will leave much to be desired. In order to get out of this mode of constant haggling, the government should use the moment to impress upon the textile exporters’ lobby the benefits of improved efficiency and quality.
pk.shafaqna.com
