Pakistan’s value added textile sector is disappointed that the government has not accorded consideration to its demands. In its budget proposals, the textile exporters had demanded restoration of Zero Rating of GST -- No Payment No Refund System.

The value added textile sector had also demanded reduction in income tax as well as sales tax rates.

Pakistan’s textile exports have been levied with a 300 per cent higher tax as compared to local businesses. The federal government in its budget has facilitated the local SMEs and neglected the SMEs of export sectors.

Globally, there are no taxes on export businesses, and where taxes are levied on exports the rate is lower than the one levied on local businesses.

Imposition of 17 per cent GST has made the textile exporters specially SMEs financially unviable as their precious liquidity, without any purpose, stuck up and they throughout the year face financial difficulties to fulfill their export commitments.

It is on record that 33% SME exporters have closed their export business since imposition of 17% GST which blocked exporters’ precious liquidity.

With the continuation of 17 per cent GST in 2021-22, many more SME textile exporters who managed to survive last year shall fear closure as well in the wake of liquidity pressure.

Therefore, SMEs textile exporters have demanded for restoration of no payment no refund GST regime which has been tried and tested or reduce GST rate to 5 per cent.