Monday, 31 July 2017 10:04

Saquib Fayyaz urges to bring down cost of production of Textile Industry

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Saquib Fayyaz Magoon

Saquib Fayyaz urges to bring down cost of production of Textile Industry

(Karachi P.R. 27th July, 2017) Saquib Fayyaz Magoon, Vice President, Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has urged the Federal Finance Minister Senator Muhammad Ishaq Dar and Hassan Iqbal, Secretary of Ministry of Textile Industry (MOTI) to bring down the present tariff rates on gas and power in Pakistan at par with the regional competitors to make Pakistan’s export competitive in global market as at present Pakistan’s cost of production is Rs. 3/unit higher than its competitors. This was stated by Saquib Fayyaz Magoon while chairing a meeting with Hassan Iqbal, Secretary of Ministry of Textile Industry (MOTI) at FPCCI Head Office, Karachi.

The FPCCI Vice President elaborated that the textile industry is burdened with Rs. 3.63 / KWH surcharge on electricity and GIDC on gas which could not be passed on to the international buyers.

The Vice President of FPCCI pointed out that the Rs. 180 billion package as announced by the Prime Minister in January 2017 was a non-starter as it had restricted its fiscal / monetary incentives to only those exporters who would show a 10% increase in their export revenue w.e.f 1st July, 2017 as compared to last year. “However, under the present scenario of a long outstanding – Sales Tax-Refund culture, there is a little likelihood of a 10% increase in export as exporters are compelled to borrow to meet their liquidity requirement which in-turn adds to their input cost”, he added.

Saquib Fayyaz Magoon showed concern on allowing rebate to export of yarn which is a basic raw material for weaving industry. He proposed, “Like textile machinery, its spare parts should also be allowed at zero rate as these are ultimately sold to the textile industry”.

Waseem Vohra, Former Vice President of FPCCI endorsing the views as expressed by Saquib Fayyaz Magoon regarding high cost of production elaborated that gas tariff in India was US $ 4.5/unit; Vietnam US $ 4.20 / unit; Bangladesh $ 3.10/unit as against $ 7.65/unit in Pakistan. Similarly, he continued, “Taxes on exports in Bangladesh Is levied @ 0.25% whereas in Pakistan @ 1% which after including indirect taxes and other levies comes to 11% of cost of exports. He reiterated that higher cost of production in Pakistan is one of the main cause of export slide”.

Hassan Iqbal, Secretary of Ministry of Textile Industry (MOTI) in response to a query replied in detail that Plastic Technology Center (PTC) Karachi as per Federal Cabinet decision would be affiliated with the National Textile University (NTU), Faisalabad and made its sub-campus under the administrative control of MOTI with the financial help of Higher Education Commission (HEC), Ministry of Finance (MOF) and Ministry of Commerce (EDF). “It will be a State-of-Art Centre which will be run under the guidance and in close coordination and cooperation of the Pakistan Plastic Manufacturers’ Association (PPMA)”, he added.

The meeting, inter-alia, was also attended by Imran Ghani, Chairman, PPMA.

Source: http://www.fpcci.org.pk/

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