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Pakistan: Garment industry urge removal of export tax

Pakistan’s garment industry is looking for help to increase the country’s exports to overcome trade deficit. Exporters therefore want payment of refunds to be expedited. They say, exports should not be taxed and that the Export Development Surcharge should be withdrawn which could lead to great dividends.

Pakistan’s textile exports rose 7.2 per cent during the first eight months of the current fiscal year. Comparatively competing countries like China, India, Bangladesh, Sri Lanka and Vietnam increased their exports at a compound rate of 20 per cent or more during the same period. Textiles make up around 60 per cent of the country’s total exports. The textile sector has the largest share in Pakistan’s exports.

Pakistan’s competitors are upping the ante in textile to gain strength in global markets. While China’s share in global textile exports is 36 per cent, Vietnam contributes 12.4 per cent, and Pakistan is seven per cent. The textile sector in the country faces numerous problems which include: high cost of doing business, multiple taxes and surcharges. Pakistan predominantly being a textile export economy is struggling to maintain its share in global markets both in basic and value added textiles.