Karachi, March 5, 2024 – The Ministry of Commerce in Pakistan has intensified efforts to address the liquidity challenges faced by the textile industry, a key sector in the country, by gathering details of outstanding tax refunds and drawbacks.
In a communication dated March 4, 2024, the ministry urged textile bodies to provide comprehensive information regarding pending sales tax, income tax refunds, and customs duty drawbacks.
This recent initiative builds on previous communications from the commerce ministry, which were issued on August 18, August 24, and September 26, 2023, addressing the pending claims of tax refunds and drawbacks within the textile industry. The ministry has once again called upon all textile and apparel associations to collect specific details from their member organizations, compiling the information into a composite summary to be submitted by Wednesday, March 6, 2024.
The urgency of this call is underscored by the significance of the textile industry in Pakistan and the challenges it faces due to liquidity issues. Resolving pending tax refunds and drawbacks is seen as a crucial step towards fostering a more conducive environment for the industry’s growth and sustainability.
In a noteworthy development, the Federal Board of Revenue (FBR) announced a day earlier that it has successfully disbursed all outstanding tax refunds to exporters, amounting to an impressive Rs 65 billion. This decision aligns with the directives of the newly elected Prime Minister, Muhammad Shehbaz Sharif, who emphasized the importance of supporting businesses and creating a favorable environment for economic prosperity in his inaugural speech on March 3, 2024, at the National Assembly.
The timely disbursement of these outstanding refunds is a significant relief for exporters who have been eagerly awaiting these funds. The injection of Rs 65 billion into the export sector is expected to have a positive ripple effect, boosting export activities and contributing to the strengthening of Pakistan’s foreign exchange reserves.
The FBR’s proactive approach in clearing all outstanding refunds up to March 3, 2024, reflects a commitment to facilitating businesses and aligning with the government’s vision for economic revitalization. The move is likely to enhance confidence among exporters, encouraging them to invest further in their operations and seize new opportunities in the global market.
As the commerce ministry works in tandem with industry stakeholders to gather details of outstanding tax refunds and drawbacks, the collaborative effort is anticipated to pave the way for a more streamlined and efficient process, ensuring that the textile industry can thrive in a supportive economic environment.
The swift actions taken by the Ministry of Commerce and the FBR to address the tax refund challenges in the textile industry are commendable. The comprehensive approach to resolving these issues is a positive step towards reinforcing the economic foundation of Pakistan and fostering growth within the vital textile sector. The industry, along with exporters, can now look forward to a more stable and conducive business environment.
