KARACHI: Citing severe liquidity crunch following the COVD-19 outbreak-led lockdown, due in part to different refunds worth Rs120 billion stuck with authorities, textile sector needed immediate government help to regain export markets, stakeholders said on Monday.
A request to this effect was made my Shahid Sattar, executive director All Pakistan Textile Mills Association (APTMA) has said, in a letter to Abdul Razzak Dawood, Advisor for Commerce, Textile Industry and Production, and Investment.
“Textile exports fell 64 percent in April 2020 as compared to the same month of last year. This means the textile industry was able to export 36 percent of its capacity even during the lockdown, when supplies to markets and inter-provincial transport services were shut,” Sattar wrote in the letter.
The APTMA official said it was their target and objective to rapidly increase export-oriented industrial activity to achieve 45 percent exports in May and 55 percent in June. “These are difficult targets as demand in USA and Europe has been limited to online sales with a very slow opening of the retail stores,” he said and added, “The market dynamics are changing rapidly and we as Pakistanis need to be fleet footed to capture an increasing share of the developing market niches”.
Despite serious cash flow problems and in the light of industry's commitment to the government and its workers the great majority of APTMA members paid April wages and salaries without layoffs.
“Other than demand, another serious hurdle in the path of exports recovery is the complete lack of liquidity in the market,” he wrote in the letter.
Federal Board of Revenue (FBR) had collected Sales Tax on all inputs but had refunded Sales Tax on goods that were exported and those also only till January 2020, he said adding that the FASTER system had failed to account for the full amount of the claim in the Sales Tax return.
Sattar said a very reasonable estimate of refundable amount stuck as sales tax paid and awaiting refund in the form of amounts deferred, amounts disappeared, goods not yet exported, or exported but funds not received, was at least Rs120 billion.
This news has been taken from www.thenews.com.pk
