The All Pakistan Textile Mills Association (APTMA) recently urged the government to take drastic measures to save the textile industry from the negative economic impact of the COVID-19 pandemic. The steps suggested include releasing the backlog of sales tax refunds and a further reduction in the discount rate by the State Bank of Pakistan (SBP).
APTMA Sindh-Balochistan region chairman Zahid Mazhar said the backlog of sales tax refunds include deferred sales tax refund and payment of outstanding DDTO/DLTL.
He urged the government to restore statutory regulatory order (SRO) 1125(I)/2011 dated December 31, 2011, to provide relief to five export-oriented industries so that they may survive, play their role in the economic development of the country and earn much needed foreign exchange which is the need of the hour, according to Pakistani media reports.
Terming the reduction in discount rate by 75 basis points by SBP ‘too little and too late’, he said the discount rate in the regional competing countries lies between 4 per cent to 8 per cent, while discount rate has been reduced by United States of America to zero per cent, by the United Kingdom to 0.25 per cent in sharp contrast to 12.5 per cent in Pakistan now.
In this scenario, it is tough for Pakistani exporters to compete with other countries, he said, demanding that SBP should further reduce the discount rate by 300 basis points.
The government should also help the textile spinning industry by freezing utility bills for at least two months so that the industry may operate without any interruption in these difficult times and also to avoid mass unemployment, he added.
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