Withdrawal of zero-rated regime disastrous for economy,stop exports from next week

MULTAN, June 15the: The workers of export oriented value added sector staged a demonstration in front of Multan Press Club to press the authorities not to implement the IMF dictated policies at the cost of country's economy. Participants shouted slogans against the IMF and its stooges who were destroying the Pakistan's export. They asked the PTI leaders why are they running after IMF for merely $ 6 billion when they can earn more than double of this foreign exchange by increasing its exports. Participants were carrying placards and banners inscribed with slogans against withdrawal of zero rated regime. The leaders of five value-added sectors have threatened to stop the export of their product from next week for indefinite period if the government withdraws zero-rated regime on their exports .
Addressing a press conference at Multan Press Club on Saturday,Syed Muhammad Aasim Shah, Ex-Vice President of FPCCI & Ex-Chairman of APBUMA, Haji Muhammad Akram Ansari of Power looms association, Ghalib Haider Quresi of Handloom Association and Abdul Jabbar  said the withdrawal of this facility would serve no purpose and result in a liquidity crunch for the export-oriented sectors.They alleged that all of this was being done to create liquidity for the government at the cost of country’s exports, which engages over a workforce of over one million people.
The representatives of these five sectors — textile, sports, surgical goods, leather and carpet — were critical of the government for taking such a decision at a time when exports are about to take off as a result of devaluation.

According to them, the initial impact of the recent rupee devaluation saw exports rise by 29 per cent in terms of rupee and 0.2pc in dollar. Leader of the forum of five-zero rated sectors — said currently only 20pc of textiles constitute local sales, 1pc carpets, 5-7pc surgical goods whereas leather goods are all exports.
he said that Government while advocates promotion of Export and ease in doing Business but on other side problems are being created for Industries. Government should decide their Economical direction in order to fix Economic development, so that country may move forward on Economic development path by promotion of Business and Industrial Activities.
He said that by abolishing Zero – Rated facility for Five Zero – Rated sectors, disastrous effects will effect on exports. Local industries will be destroyed and capital will be drain from country, which will create highly Negative effects over Exports and Extra ordinary Volume e witnessed in un-employment while Government will face huge losses in foreign exchange.Syed Muhammad Aasim Shah further said that, it is not a wise step that “First pay tax and then return back”. When tax has to be returned then it is better not to collect tax. Government already has to pay refund worth Rs. 329 billion to exporters and Government has no money for payment. Abolition of SRO – 1125 will create additional burden over Government. He further said that by withdrawal of Zero – Rated facility, exporters will face huge financial crisis and ways of corruption will be created. He demanded from Government that in the best interest of our Country Zero – Rated facility must not be withdrawn and to promote industries and for favourable Business Environment necessary steps may be taken.
Ex-Chairman of APBUMA said the economic mantra of the new government was to boost exports. He said it was claimed that the rupee depreciation was aimed at also to boost the exports. He regretted that the same government on alleged pressure of the IMF is going to withdraw the zero-rated facility for selected export sectors – value added textile, sports goods, surgical, leather and carpet – which would deal a deadly blow to our industry, economy and employment.
Shah  said that the economic policies of the PTI government have, so far, failed to deliver. The Economic Survey report depicts a dismal picture of the economy, with large sectors posting negative growth and next year’s target for total GDP growth being a paltry 4 percent.
He said instead of revenue generation through production and industry the government is focusing on indirect means like amnesty schemes which may not augment the shaky foundations of our national economy.

APBUMA leader said the unprecedented depreciation of Pakistani rupee, neck-break inflation, burden of new taxes, less spending on social sector and now even more foreign loans are affecting the lives of millions of Pakistanis and increasing poverty and hunger in the country.
He advised the government not to evoke the anger of traders and industrialists by withdrawing zero-regime for five export-related sectors, and slapping more taxes on them.
He reminded that the leaders of export oriented industries have already warned that “discontinuation of zero-rated status will result in ruin and disaster of export-oriented industries, flight of capital, mass unemployment and huge foreign exchange losses.”
He said if the government took the harsh decision under the alleged pressure of the IMF to withdraw the facilities given to the export sector, it would open new floodgates of joblessness in Pakistan, as hundreds of export-oriented units would be ultimately closed down, which would be a bad omen for Pakistan and its economy.