Pakistan has extended its export package for three years. This is meant to enhance the country’s export receipts, improve competitiveness in textile and non-textile sectors in a bid to increase the pace of growth in exports in the coming financial years.
To incentivise investment in export-oriented production, the drawback of local taxes and levies scheme has been extended on the same terms and conditions for commercial as for non-commercial exporters. The hope is that the three-year extension in export package for value-added and non-traditional products and markets would provide an incentive to local and foreign stakeholders for investment in export-oriented production capacities.
These components of the export package are expected to provide significant competitiveness benefits to the export sector. The package is in addition to other relief measures announced for the export sector. The package has contributed to a U-turn in exports in fiscal year ’18, which had earlier been declining continuously since fiscal year ’14. Textile producers expect a further hike in exports.
In Budget ’19, packaging material has been included in the sales tax zero-rated regime, which was initially designed for five major export industries--textile, leather, sports goods, surgical goods and carpets.