Industrialists termed govt. refusal to restore zero rating as disastrous

Karachi, June 08, 2020: Capt. A Moiz Khan, patron-in-chief, North Karachi Association of Trade and Industry (NKATI) and President Naseem Akhtar have expressed concern over the media news regarding not restore zero rated regime by government and feared that if the government does not restore the zero rating system for the five export sectors, they will face a severe financial crisis and will be forced to close industries due to lack of capital.

NKATI leaders appealed to Prime Minister Imran Khan, Finance Adviser Abdul Hafeez Sheikh and Adviser Commerce and Investment Abdul Razak Dawood to save the export-oriented industries from complete collapse as if the industries shut down then unemployment would rise.

“The refusal of the government to restore SRO 1125 for export industries and restore the system of “No payment No refund” was an indication that the government had no interest in promoting exports. Corona has destroyed business and industry and made it extremely difficult for industries to survive. Despite all this dire situation, the government’s neglect of the export sector is a matter of great concern to the industrial community”, they added.

Capt. A. Moiz Khan and Naseem Akhtar further said that the government first collects 17 percent sales tax from the export sector and then instead of focusing on tax collections, the entire tax machinery of FBR is spent on tax refunds. Even so, sales tax refunds take 4 to 5 months, while the automated sales tax refund system ” Faster ” has become ineffective.  This means that the industrialists should have separate capital for exports and for government also in terms of sales tax, as a result their capital was stuck.

NKATI leaders questioned why the government was reluctant to restore the “No payment No refund” regime in view of the current severe economic crisis. The government should take relief measures to revive trade and industry in the wake of the economic catastrophe due to Coronavirus and provide maximum facilities to restore industrial production activities so that we can regain our lost share in the international markets and the country can move on the path of economic development.

They informed the government that European countries, including the United States, especially in large chain stores, have been hit hard by the Corona and that the majority of foreign buyers have lost the ability to purchase goods on cash and are demanding goods on longer borrow while China and India are ready to give this facility. Therefore, if the government does not provide immediate relief to the export-oriented industries in terms of taxes and not help in reducing the cost of production, then the country’s exports will come down further and exporters are in danger of going bankrupt.

“State Bank of Pakistan has provided loans to employers to pay workers’ salaries. Despite all these facts, the government’s refusal to provide relief to industries is discouraging investors, leading to the closure of existing industries”, they pointed out.

Capt. A. Moiz Khan and Naseem Akhtar appealed to Prime Minister Imran Khan, Finance Adviser Abdul Hafeez Sheikh and Adviser Commerce and Investment Abdul Razak Dawood to restore the zero rating regime for export-oriented industries so as to boost domestic industries and create vast employment opportunities. They said that significant foreign exchange could be brought by increasing the country’s exports.

Leave a Reply

Your email address will not be published. Required fields are marked *