Changes in re­fund mech­a­nism pro­posed to boost ex­ports

The Pak Banker - - NATIONAL -

Pres­i­dent Pak­istan Busi­ness­men and In­tel­lec­tu­als Fo­rum (PBIF), Pres­i­dent AKIA, Se­nior Vice Chair­man of the Busi­ness­men Panel of FPCCI and for­mer pro­vin­cial min­is­ter Mian Zahid Hus­sain on Fri­day pro­posed changes in the re­fund mech­a­nism to boost ex­ports.

Fa­cil­ity of zero rated regime (no tax no re­funds) should be pro­vided to ex­porters as the with­held re­funds con­tinue to dam­age com­pet­i­tive­ness of ex­port sec­tor, he said. Mian Zahid Hus­sain said that ex­ports sharply de­clined by 13.26 per­cent in July-Feb which is omi­nous for largest ex­port earn­ing sec­tor and 2nd largest em­ploy­ment pro­vid­ing sec­tor of tex­tiles.

He said that ar­gu­ment of global re­ces­sion is ques­tion­able as ex­ports of com­pet­ing na­tions are con­tin­ued to rise; Bangladesh ex­ports have gone up by eight per­cent in the same pe­riod.

Gov­ern­ment has an­nounced to pay stuck up re­funds to the tune of five mil­lion dis­re­gard­ing the fact that ma­jor­ity of ex­ports doesn't fall in this cat­e­gory as their claims in a month ex­ceed than that amount. Mian Zahid Hus­sain said that five per­cent money of ex­porters is with­held in re­fund process while thirty per­cent of work­ing cap­i­tal of tex­tile sec­tor is be­ing held since long which has re­sulted in clo­sure or many units.

The run­ning units have scaled down their ca­pac­ity by 30 per­cent and millers are com­pelled to avail loan on higher in­ter­est rates from banks to keep their busi­ness run­ning and hon­our com­mit­ments.

De­layed re­funds has re­sulted in in­creased cost of do­ing busi­ness and un­met obli­ga­tions dam­ag­ing coun­try's rep­u­ta­tion, he said, adding that the is­sue con­tinue to erode coun­try's com­pet­i­tive edge in the in­ter­na­tional mar- ket. Law of re­fund pay­ment within forty-five days is be­ing de­fied since long which has dam­aged the tex­tile and other ex­port sec­tors that will eat up for­eign ex­change re­serves, he warned.

Lack of will to pay re­funds will ridicule the re­cently an­nounced trade pol­icy, he said.

Mean­while, A meet­ing was called at Min­istry of Cli­mate Change invit­ing pri­vate sec­tor to en­gage in the Prime Min­is­ter's Green Pak­istan Pro­gram. The par­tic­i­pants' in­volved rep­re­sen­ta­tives from dif­fer­ent banks, telecom­mu­ni­ca­tion sec­tor and other cor­po­rate or­ga­ni­za­tions.

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