Manufacturers Warn of Huge Job Losses

The Federal Budget Speech 2020-21 has been characterized as nonsensical by textile industry leaders and industrialists, and no relief has been announced for the textile industry that would raise unemployment.

Muhammad Javed Bilwani, the Pakistan Apparel Forum leader, said so far nothing has been said for the textile sector, nothing has been said about exports. Local sales tax has been lowered from 14 percent to 12 percent.

He said, “They had levied sales tax of 17 percent on us saying they would bring local buyers into the tax network, but this region was not discussed. The number of exporters is decreasing in Pakistan.”

Speaking of custom refund automation, he said it’s already completed. They were committed in January 2019 to automating custom refunds but that has worked now.

The former vice president, All Pakistan Textile Mills Association (APTMA) Asif Inam said the speech on the budget was incomprehensible. “There was no relief provided to small and medium-sized enterprises, no relief for industrialization. APTMA’s proposals were not welcomed either, energy rates were not reduced. Subsidy just falls into the pockets of the few,” he added.

Ijaz Khokhar, chief co-ordinator of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), also agreed with Inam. “No industrial revival was discussed. No announcement has been made regarding export improvements, “he added.

He said there was a need for a zero-rated sales tax system but the budget did not mention the sales tax at all. “They’re not motivating. It’s been called a tax-free budget but other taxes have increased. “This will affect the public as a tax structure has changed.”

“Exports were not going to increase, but the government should have given taken steps to revive them. Our productivity will not increase from 50 to 60 percent. Competitiveness is not in our hands anymore,” he added.

He also interrogated the proposal to allocate Rs10 billion to manage the locust swarms and said the locust damage exceeded Rs10bn. “It’s not a budget which is business-friendly,” he said.

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