PM announces textile package; DLTL enhanced, condition for annual export growth relaxed
KARACHI: Prime Minister Mian Muhammad Nawaz Sharif on Tuesday announced much awaited export package of Rs180 billion to be implemented within 18 months to positively impact textile sector.
It was need of the time to support exports sector as exports on the whole and textile exports in particular are on decline, analysts at Topline Research said.
According to the analysts, the package included enhanced Drawback of Local Taxes and Levies (DLTL) rates with inclusion of Yarn/Grey to the DLTL list at
1) Yarn/Grey 4 percent
2) Processed Fabric 5 percent
3) Home Textile 6 percent
4) Knitwear 6 percent; and
5) Garments 7 percent
While removal of 10 percent annual exports growth precondition for entitlement to DLTL for first six months (after 6 months continuation of 10 percent exports enhancement precondition) have been approved.
As well as that, removal of sales tax on import of textile machinery was also approved along with removal of 4 percent import duty on import of cotton.
The analysts said that the rationale for the proposed package was losing competitiveness among the regional exporters. As per the minister, the cost of doing business including gas, power tariff, GDIC, sales tax and Pak rupee exchange rate created pressure on export sectors in general and textile in particular.
The above measures of the government targets to double the existing textile exports of around $12 billion in next 5 years.