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Tag: APTMA

  • APTMA disapproves Indian cotton import

    APTMA disapproves Indian cotton import

    KARACHI: All Pakistan Textile Mills Association (APTMA) has strongly disapproved any plan to import cotton yarn from India.

    In a statement issued on Friday, Asif Inam, Chairman – APTMA Sindh-Balochistan Region expressed deep concern on drastic decline in price of fine counts of yarn by Rs. 10,000/- per bag in the Faisalabad Yarn Market which is in expectation of massive tax evasion plan by individuals in anticipation of permission be allowed to import cotton yarn from India through Wagah Border.

    Asif Inam in a statement issued to the press and electronic media has said that industry has procured cotton at very high prices and they are not in a position to sustain these losses.

    He said that about 90 percent of yarn produced in the country is available for the domestic market and there is no shortage of yarn in the country.

    Asif Inam urged the government not to allow import of cotton yarn from India as India has imposed restriction on import of all Pakistani products.

    To restrain import of yarn from India and support the local industry he demanded the government to withdraw levy of sales tax on zero rated sector so that the genuine industry may flourish and be able to provide yarn at affordable prices.

    He also urged the government to save domestic industry from total closure, DLTL should not be provided on those entire textile products produced using imported materials which are either produced or manufactured in Pakistan as all such textile items which are produced using imported materials are incurring losses to the national exchequers because most of the exporters falls under the category of Fixed Tax Regime whereas they are also availing DLTL facility ranging between 2 percent to 4 percent and subsidized Export Refinance Facility which is provided from the revenue earned by the government from Pakistani Taxpayers. DLTL and ERF should only be provided on the products produced using domestic yarn and fabrics, he added.

  • APTMA says no cotton yarn shortage in country

    APTMA says no cotton yarn shortage in country

    KARACHI: All Pakistan Textile Mills Association (APTMA) on Wednesday strongly rejected the shortage of cotton yarn claimed by Pakistan Hosiery Manufacturers Association (PHMA) and Pakistan Textile Exporters Association (PTEA) and their proposal of allowing import of cotton yarn from India. 

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  • APTMA protests against FBR’s coercive action

    APTMA protests against FBR’s coercive action

    LAHORE: All Pakistan Textile Mills Association (APTMA) has demanded the government of stopping coercive action initiated by the Federal Board of Revenue (FBR) and withdraw cases lodged against exporters and manufactures.

    In a statement issued on Saturday, APTMA chairman Adil Bashir said that Prime Minister of Pakistan was all out to support the export-oriented sectors of Pakistan but some vested interests are bent upon frustrating the intents of the government by harassing exporters and hindering the unprecedented growth in exports.

    According to him, exports from Pakistan have registered an impressive uplift over the last few months due to unflinching support by the prime minister but the pace of potential upsurge in exports may be retarted by unfriendly attitude of certain government functionaries.

    He said that FASTER and Weboc systems of FBR have become hub of errors and glitches, and FBR has itself repeatedly publicly admitted that FASTER system had multiple flaws, mistakes and deficiencies.

    He regretted that instead of correcting the system and making it more efficient, field formations of FBR have started lodging stereo typed FIRs without applying judicious mind and without an iota of evidence of malafide intention and mens rea on part of the said taxpayers.

    In the absence of any willful default and without mens rea which are essential ingredient of initiating criminal proceedings, FIRs are being lodged which may pollute congenial business environment created due to hard efforts by the government. He asked how it was possible that an exporter claiming refund of tens of millions of rupees would indulge in any petty malpractice by adding another few million and create problem for himself.

    In this regard, he particularly mentioned that Large Taxpayers Office (LTO), Lahore has recently registered FIRs against leading textile exporters in total disregard to the fact that computer system of FBR had itself erroneously uploaded input tax adjustment of sales tax twice.

    Bashir said FBR system had uploaded the data twice erroneously due to system error in September 2019 and there was no misdeclaration or omission on part of the taxpayers.

    He added that the alleged offence relate to only the month of September 2019 which establishes that it was not an individual act but result of systematic error of FBR itself.

    He said that initiating criminal proceedings by LTO Lahore against major reputed companies even without confronting them or issuing show-cause notices is contrary to the principles of natural justice and amounts to gross harassment of leading taxpayers.

    He said that it was very painful to name and shame all Directors of the mills by nominating them in the FIR without even conducting a meaningful inquiry and in the absence of any incriminating evidence.

    He stressed that in case any agency of FBR finds any lapse in the compliance of tax laws, it should serve proper show cause notice upon the alleged taxpayer and no criminal proceedings should be initiated against any such person unless and until the case has stood scrutiny and test of an impartial judicial forum.

    Adil Bashir offered the services of APTMA to FBR in conducting any meaningful inquiry against tax evaders, he added.

    He expressed the hope that the Federal government would take stock of the situation and issue necessary directions to FBR for immediate withdrawal of FIRs in the larger interest of the business environment in the country and fostering of exports.

  • FBR urges taxpayers to lodge complaints against officials demanding bribe for clearing refunds

    FBR urges taxpayers to lodge complaints against officials demanding bribe for clearing refunds

    KARACHI: Federal Board of Revenue (FBR) has advised taxpayers to lodge complaints against tax officials, who are demanding bribe for clearing stuck up refunds.

    “Immediate action will be taken against the delinquent functionaries,” said Dr. Muhammad Ashfaq Ahmed, Member Inland Revenue Operations, Federal Board of Revenue (FBR) in a meeting with the office bearers of All Pakistan Textile Mills Association (APTMA).

    According to a statement released by the APTMA on Wednesday, the Member also urged the taxpayers to lodge complaints against the harassment by the tax collectors.

    The meeting discussed in detail the issues pertaining to the release of Sales Tax refunds in seventy-two hours, removing irritants of the Annexure-H, issuance of Income Tax exemption on electricity bills, delay in Income Tax refunds and other irritants faced by export oriented industries.

    APTMA delegation comprised of Raza Baqir and Shahid Sattar while the Member Inland Revenue Operations was assisted by concerned chiefs and secretaries of the Board.

    Dr. Ashfaq reiterated the resolve and commitment of the government for expeditious payment of tax refunds and removal of all irritants in doing the business.

    He told APTMA delegation that release of refund claims has been expedited by the Board and it would be ensured that all sales tax refunds are paid within 72 hours.

    He said all the systematic issues relating to Annexure H would be removed within a week which will facilitate exporters in filing of refund claims. He added that Annexure-H would be simplified to facilitate the taxpayers. According to him, the trial test of the changes made in software of Annexure-H is underway and it would be implemented shortly.

    He said the Board was also releasing the outstanding and deferred refund claims of the exporters on war-footing basis.

    Furthermore, he urged the APTMA delegation to convey all member mills to file their Income Tax refunds at the earliest for speedy clearance.

    APTMA delegation appreciated the efforts made by the Board for early disposal of refund claims of the export-oriented industry, saying that the member mills were satisfied with the performance of the tax machinery.

    The delegation further expressed the hope that the Board would start clearing refund claims within 72 hours of their filing by the exporters.

    The delegation further expressed the hope the FBR would soon overcome the inherent loopholes, infirmities and snags in the system and adopt measures to remove all odds which hamper and retard the system.

  • Budget fails to address industry issues amid COVID crisis: APTMA

    Budget fails to address industry issues amid COVID crisis: APTMA

    KARACHI: All Pakistan Textile Mills Association (APTMA) has rejected the federal budget 2020/2021 saying that the budget has failed to address serious industry issues in the light of the worldwide Covid-19 created crisis.

    This is likely to lead to large scale unemployment and closures and as the market dynamics have changed Post Covid, it said in a statement issued on Monday

    Bold and direct steps were required to retain our export earnings and maintain employment in a shrinking world Market due to lack of demand especially textiles which constitute 60 percent of export earnings.

    It said our Balance of Payments position is likely to worsen as a result of the lack of appreciation of the issues facing exports and the expected 20 percent drop in remittances (World Bank estimate) due to large scale layoffs in the Gulf countries and Saudi Arabia.

    Resolution of followings is requested at earliest;

    1. Provision of Regionally Competitive Energy Prices

    Continuation of regionally competitive fixed electricity tariff at 7.5cents/KWh and $ 6.5 per MMbtu for RLNG/gas across the value chain to ensure competitive export pricing.

    Non continuation of regionally competitive energy rates will lead to direct closure of around 30 percent of factories within six months.

    Unless corrected, as of July 1st, 2020, exporting sectors will be charged Rs 24 / kwh as normal B3 industrial tariff instead of Rs 12 earlier and even if RLNG is continued at $ 6.5 /MMBTU this contrasts with $ 3.5 RLNG /Gas tariff for India and Bangladesh. Meanwhile Electricity Prices in India have seen a further drop of 16 percent over the last 2 months while currently averaging about 7.2 cents/kwh for Industry. Energy accounts for 35 percent of conversion costs in the Textile value chain and therefore competitive pricing of exports is very highly sensitive to Energy pricing.

    It had been agreed that Rs 20 billion will be allocated for energy for use in maintaining 7.5 cents / kwh for electricity and $ 6.5 / MMBTU for RLNG/ Gas. The budget however only allocates Rs 10 billion for RLNG.

    Competing countries are already poised to combat highly competitive market conditions through cheaper electricity and gas rates.

    2. Zero Rating/ 17 percent GST

    Continuation of 17 percent GST is not sustainable as by design GST refunds of 5 months remain in pipeline.

    As a result Rs 20 billion per month has shifted from the coffers of the industry to FBR (amounts to Rs 100 billion plus which is in process at all times).

    This has increased the cost of doing business by about 6 percent.

    Sales tax exemption on imports through Bond, EOU & DTRE would be withdrawn immediately.

    17 percent is a very high level incentive to cheat. A lower rate would;

    a) Allow Proper Documentation

    b) Increase FBR Revenue through wider application

    c) Allow organized domestic retailers to compete in the 13 Billion dollars domestic textile market.

    We therefore requested the government to restore zero rating or to reduce sales tax rate to 5 percent across the value chain.

    3. 1.5 percent Turnover Tax/ Minimum Tax

    This tax increases cost of exports by an average 5-6 percent as the tax is levied on the same goods multiple times as it passes through the value chain.

    The Textile Industry works on very slim margins and turnover tax acts as an accelerator to early closure of mills.

    Continuation of 1.5 percent turnover tax in a situation where there will be no profitability is completely unjustified.

    4. MMF & Polyester Staple Fiber

    There is 7 percent customs duty on the import of polyester staple fiber with total import expenses in the range of 20 percent including antidumping duty.

    Polyester staple fibre is a raw material of the industry and as repeatedly committed by the government should not be subject to any duties.

    More than 60 percent of world textile trade is in MMF materials and this duty protection given to obsolete plants in Pakistan is denying the Pakistani industry any chance to compete in this growing majority section internationally or domestically.

    Any protection to domestic polyester plants may be given directly by the government and not at the cost of our country’s economic future.

    5. DLTL

    With refunds of approximately 5 percent due on $ 10 billion exports the quantum of DLTL due will be Rs 80 billion. This was also the amount requested for allocation by Ministry of Commerce.

    The budget has allocated only Rs 10 billion for DLTL. DLTL is a calculation of government taxes component in the cost of exports and if this is not catered for will further weaken our export competiveness.

    6. TUFF

    Rs 4.5 billion are pending under TUFF scheme.

    Whereas amount allocated in this budget for TUF scheme is only Rs 400 million.

    The amounts have been due for the past 7 years and this sort of delay annuls industries’ faith in Government commitments.

    7. New Textile Policy

    Implementation of the in principle approved Textile Policy is required in true letter and spirit for Pakistan to maintain and increase employment and exports.

    It may please be noted that without correction of these issues in the budget proposals, the industry will contract by 30-40 percent and well over one and half million people will lose their jobs.

  • APTMA demands gas tariff reduction up to 40 percent

    APTMA demands gas tariff reduction up to 40 percent

    KARACHI: All Pakistan Textile Mills Association (APTMA) on Monday demanded the government of reducing gas tariff by 35-40 percent for export oriented sectors in line with significant deline in international oil prices.

    Zahid Mazhar, Chairman, APTMA Sindh-Balochistan Region has demanded the Prime Minister Imran Khan and the Economic Managers of the Government to reduce the indigenous gas tariff for the five export oriented sectors in line with major reduction in oil prices in the international market, to recover from the negative impact of Coronavirus (COVID-19) on the economy and exports.

    Mazhar said that the wide spread of COVID-19 Pandemic has severely disrupted the global economy so large that some economists have suggested that it will be even worse than the great depression.

    In case of Pakistan due to slowing down of the growth momentum, the growth rate would be far below the target of 2.4 percent initially fixed for the current Financial Year, now expected to end up in negative growth of -1.5 percent.

    To offset the devastating impact of Coronavirus on the economy, industry and international exports, the rate of natural gas for the industries, specially the export oriented industries including their gas power generation plants which may be part of the same concern or associated concerns incorporated separately, should be reduced by at least 35 to 40 percent as the cost of energy is the major component of the total cost of production.

    The drastic fall in the international oil prices to around $40 from the previous level of $65 also justifies the reduction in gas prices, Zahid Mazhar added. In India the prices of gas have already been reduced drastically.

    Pakistan needs to capitalize on its best trait to grab the post Covid Opportunities and that opportunity is Exports of Textiles.

    Only Textile can help us get out of the present crisis and bring massive foreign exchange and provide employment to match the targets of the Prime Minister.

    Pakistan’s textile sector contributes 8.5 percent in GDP, employs 40 percent of the national labour force and contributes to almost 60 percent of total exports.

    Already in the international export arena the countries (especially competitors of Pakistan) are going out of way to grab lost markets and exploring new markets.

    Export oriented Countries are reducing utility (Power & Gas) rates to make their industries competitive and position themselves into the international markets, especially US and Europe.

    Pakistan’s textile exports are already facing the negative consequences of high energy tariffs relative to other competing countries. It is now or never situation for the textile industry to grab the market share, which cannot be achieved without government intervention by reducing the cost of production.

    Therefore the cost of natural gas which composes of a big chunk in the cost of production should be reduced with immediate effect in the best interest of the economy and the Export Oriented Textile Industry.

  • APTMA demands allowing textile downstream supply chain operation

    APTMA demands allowing textile downstream supply chain operation

    The All Pakistan Textile Mills Association (APTMA) has fervently appealed to the Sindh government to lift restrictions on the textile downstream supply chain, emphasizing the urgent need to resume operations to prevent a looming unemployment crisis.

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  • APTMA demands sales tax zero rating revival

    APTMA demands sales tax zero rating revival

    KARACHI: All Pakistan Textile Mills Association (APTMA) on Wednesday demanded restoration of sales tax zero rating as authorities failed to fulfill commitments of repayment of refund under new online refund system.

    In a letter sent to Abdul Razzaq Dawood, Advisor for Commerce, Textile, Industry & Production and Investment, the association informed that since domestic sales constituted 50 percent of textile output, zero rating led to sales tax evasion to the tune of $12 billion sales.

    At the time, APTMA had proved that this was a false assertion and this fact has now been admitted by FBR. This FBR has now stated on record that the domestic sales of the textile sector only account for 20 percent of the overall value of textile production of the country.

    The APTMA said that the misplaced withdrawal of zero rating, the entire textile industry has suffered immensely and the levy of sales tax in its present form and design has led to almost Rs20 billion (5-6 months total impact Rs100 billion) liquidity moving from the industry to FBR.

    It is further informed that prior to July 2019, the industry had become competitive and profitable and if the zero rating scheme would have continued these funds would have been spent on new projects, upgradation and expansion of the industrial base and resulted in increased exports for the country. The economic cost of the withdrawal of zero rating has been colossal.

    The amount of sales tax being paid by the industry is even more that the annual profits of most companies. Many companies have had to borrow from banks to finance this unjustified levy resulting in an increase in their cost of production.

    “Thus, negating the government claims to move on a policy of reducing the cost of doing business in Pakistan.”

    At the time of withdrawal of SRO 1125, the government had assured the industry that it would review the situation in 6-8 months’ time. More than nine months have now passed, and it is evident that the Sales Tax system is not contributing significantly to the FBR kitty.

    On the other hand, the entire government, FBR and the entire industry is constantly holding meetings and wasting precious time and money on resolving the issue of refunds.

    Sales Tax refunds are not forthcoming as per the promised and unequivocally stated claims that payments would be made would be paid within 72 hours of filing of H forms.

    This has not happened and the sales tax claims even after filing of H forms have remained unpaid for months on end.

    In fact, the flow of quantum of refunds was very tightly regulated by the Ministry of Finance/FBR and processing of payments limited to the quantum/value predetermined by the Ministry of Finance.

    The Sales Tax returns/H forms were routinely deferred or rejected by FBR on artificial limits established by them which had no basis in reality of the industry.

    In other words, nothing had changed from previous years in terms of refund processing.

    The situation post-Covid19 has changed drastically for the industry, as export orders have been cancelled, payments due against LCs delayed, and fresh orders not forthcoming.

    This is because of a complete collapse of markets and demand for textiles in Europe and USA. Circumstances are not expected to return to normalcy for quite some time.

    It is not possible to expect the value chain to keep on paying Sales Tax with little chance of obtaining their refunds in a timely and agreed manner from FBR.

    This delay results in affecting the entire supply chain as the exporters delay payments to their suppliers who in turn are forced to delay down the line.

    This has resulted in severe cash flow problems in part owing to the banks reluctance to finance these payments.

    Under these circumstances, the association demanded the immediate restoration of SRO 1125 i.e zero rating for the textile supply chain. “Should government still wish to collect sales tax on domestic sales, from a market that is already in dire straits, then it should collect the Sales Tax at the Point of Sale.”

    In the foreseeable future the continuation of the Sales Tax regime applicable to an industry with 80 percent exports is counterproductive and will make recovery of exports to any significant level post-COVID very difficult and even make it impossible.

  • APTMA demands deferment of utility bills, interest payment

    APTMA demands deferment of utility bills, interest payment

    KARACHI: All Pakistan Textile Mills Association (APTMA) has demanded the government of granting deferment of utility bills and interest payment against loans as industry was facing acute liquidity shortage.

    APTMA Chairman Zahid Mazhar emphasized that currently there is an acute shortage of liquidity and it is impossible for the mills to pay the utility bills.

    He requested the government to come to the rescue and immediately announce the deferment of payment of gas and electricity bills by the industry for a period of at least one month.

    He further demanded deferment of payment of interest on short term loans for at least three months. He also pointed out the dire need to immediately bring down the rate of interest to 5 percent.

    Zahid Mazhar, appreciated all the positive steps the provincial and federal governments have under taken to control wide spread of Coronavirus (COVID-19) Pandemic and to combat its adverse impact.

    He said that due to drastic slowdown of domestic as well as international markets and delay in receipt of payment from them in addition to cancellation of export orders even from big organizations and large scale buying houses, export oriented textile industry is facing worst ever liquidity crisis.

    He said the Coronavirus (COVID-19) Pandemic is having extremely negative impact on Pakistan’s economy. Though the government has taken some positive steps like deferring loan repayments and speeding up of refunds but it will fall far short of keeping the industry afloat.

    He further said that drastic situation needs drastic measures to be taken to save our export oriented textile industry from the negative economic impact of Novel Coronavirus (COVID-19) as it is showing adverse impact on exports.

    He demanded the government to provide immediate relief in the best interest of industry, economy and the people as the impact of slowing of economy and lockdown can only be shielded by the industry for a month or two beyond which there will be no capacity to retain workers leading to massive unemployment.

    He requested the Government of Sindh to allow running of those textile mills which have labour residing within their residential colonies as well as those export oriented units which have export orders in hand.

  • APTMA demands restoration of zero-rate sales tax, policy rate reduction to 5pc

    APTMA demands restoration of zero-rate sales tax, policy rate reduction to 5pc

    KARACHI: All Pakistan Textile Mills Association (APTMA) on Tuesday demanded the government of restoring zero-rate sales tax and reducing interest rate to five percent in order to help the industry and ensure jobs.

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