Textile exporters in Pakistan are awaiting sales tax refunds. They say the delay in refunds has disrupted their business activities and future plans and is badly impacting exports as exporters’ liquidity has already taken a strong hit from negative impacts of the global recession.

There is a fear that textile exports in November might fall. Achieving export targets, say the exporters, is only possible if the government continues its favourable policies towards the industry.

Pakistan’s textile industry, which comprises 46 per cent of the total manufacturing sector, provides employment to around 15 million Pakistanis and contributes 8.5 per cent to the GDP.

Regionally competitive electricity tariffs have enabled the textile sector to perform exceptionally well during recent years. The textile export industry has entered a sustainable economic growth phase; however, the emergence of an economic crisis could be an instant setback.

Exporters say there is a strong but not accurate perception that the government is providing too many subsidizes to the textile sector in terms of energy prices and tax exemptions on imports of raw material. They say the subsidised advances to the textile sector are less than what the government owes to the sector under various refund schemes and that the sector is also paying the cost of this stuck-up working capital.