Changes in refund mechanism to boost exports :Mian Zahid Hussain

Lahore: President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister Mian Zahid Hussain on Friday proposed changes in the refund mechanism to boost exports.

Facility of zero rated regime (no tax no refunds) should be provided to exporters as the withheld refunds continue to damage competitiveness of export sector, he said.

Mian Zahid Hussain said that exports sharply declined by 13.26 percent in July-Feb which is ominous for largest export earning sector and 2^nd largest employment providing sector of textiles. He said that argument of global recession is questionable as exports of competing nations are continued to rise; Bangladesh exports have gone up by eight percent in the same period.

Government has announced to pay stuck up refunds to the tune of five million disregarding the fact that majority of exports doesn’t fall in this category as their claims in a month exceed than that amount.

Mian Zahid Hussain said that five percent money of exporters is withheld in refund process while thirty percent of working capital of textile sector is being held since long which has resulted in closure or many units. The running units have scaled down their capacity by 30 percent and millers are compelled to avail loan on higher interest rates from banks to keep their business running and honour commitments.

Delayed refunds has resulted in increased cost of doing business and unmet obligations damaging country’s reputation, he said, adding that the issue continue to erode country’s competitive edge in the international market.

Law of refund payment within forty-five days is being defied since long which has damaged the textile and other export sectors that will eat up foreign exchange reserves, he warned.

Lack of will to pay refunds will ridicule the recently announced trade policy, he said.