The weaving sector, particularly ones that supply goods to exporters for being shipped abroad, are almost on the verge of collapse due to government’s policies. In other words, all trading activities have come to a halt and now all weavers are at the mercy of exporters to get yarn from them. In addition to this, the financially weak exporters who were relying on traders and indirect exporters to provide them fabric are going out of business.
Addressing an extraordinary general meeting of the Pakistan Weaving Mills Association (PWMA) Asif Siddiq, a founding member said that exporters have been allowed to import yarn without duty or income tax and sales tax. On the other hand indirect exporters have to pay a 15 per cent customs duty and one per cent income tax on import of yarn, he added.
Due to shortage of cotton in Pakistan and high input cost, the weaving industry is relying mostly on imported yarn from India, China, Indonesia and Turkey. With this kind of policy, the government has taken the indirect exporters out of the market, he added.
The government needs to deal with direct and indirect exporters in an even-handed way and consult all stakeholders before making policies. Siddiq hoped that the textile package about to be announced by the government should address this issue. At the same time, he demanded, the government should immediately release sales tax refunds so that the textile sector can come out of its financial crisis, which he attributed to delays in the payment of refunds.