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Levies hurt Pakistan’s exports

Pakistan’s exports have come down by 12 per cent last fiscal year due to taxes, levies and surcharges. These have made exports 10 to 15 per cent costlier against regional competitors’. Bangladesh’s exports rose 6.5 per cent in May from a year earlier on stronger garment sales.

But Pakistan’s exports from July to May, the first 11 months of the country’s 2015-16 financial years, rose 8.9 per cent from a year earlier. Sales of garments, comprising knitwear and woven items, were up 9.4 per cent from a year earlier.

Pakistan’s textile sector contributes around 50 to 55 per cent in the country’s exports. The Textile Policy 2014-19 seeks to double textile exports to 25 billion dollars by 2019, increase the share of value addition and improve the product mix, especially in the garment sector, from 28 per cent to 45 per cent.

The Drawback of Local Taxes and Levies (DLTL) scheme would continue under the new policy. Under it, if any textile exporter achieves incremental textile exports beyond 10 per cent over the previous year, he will be given DLTL at the rate of four per cent for garments, two per cent for made-ups and one per cent on processed fabrics.