Huge amount of exporters’ liquidity of billions of rupees in Sales Tax Refund, Custom Rebate, Withholding Tax, DDT and DLTL has been stuck up with the government causing great sufferings to the already burdened exporters who are now at a loss to understand how to make both ends meet and such an alarming situation will ruin the export business of the value added textile exporters.

Severest ever liquidity crunch being faced by the exporters due to excessive delays in release of payments against sales tax refunds. Reportedly, hundreds of exporters SMEs have stopped their production owing to liquidity problems and shall be compelled for closure if their sales tax refunds are not released on immediate basis to facilitate them to get new orders and resume production. Small and Medium Export Industries are in total dire straits and demand immediate attention of the Government for their survival, lamented Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum.

He said that approx. rs. 62 bn of textile exporters liquidity held up with government under FASTER Refund System in last 4 months, after imposition of 17 percent sales tax on exports. Before abolishing SRO 1125 – 0pc sales tax for five export oriented industries – government committed that sales tax refund claims payments will be paid immediately after submission of GD like Bangladesh Model.

Contrary to Bangladesh Refund Model, Govt. launched FASTER by which sales tax refunds to be paid within 72 hours electronically. New FASTER system has been failed and FBR processing claims manually and SBP paying refund on advice of FBR. It is indeed deplorable, he said, the huge amount of exporters are held up by the Government.

He said that exporters have a gut feeling that FBR with its harsh policies is trying to destroy value added textile export sector which is the largest export sector and labour intensive. It is an alarming situation that new comers are not interested in the business of export sector due to harsh incumbent government policies. Our existing Export Industry gets spillover orders from the international buyers and is surviving due to economy of scale and efficiency in the production.

He demanded that government should clear all pending refund payments of exporters forthwith and restore zero rating (0 percent) of sales tax – no payment no refund regime in the best interest of exports, economy, foreign exchange earnings, employment etc.