MM News

KARACHI: Faisal Moiz Khan, President North Karachi Association of trade & industry (NKATI), while expressing deep concern over the lack of clear policy regarding drawback on local taxes and levies, and has been discontinued from 1st July 2022 and all the banks will not take any documents after the date in this regard.

Under this, all banks will not take any documents after July 1, 2022. If the DLTL policy is withdrawn for any reason, it will destroy a business, especially domestic exports, and exporters will face a financial crisis.

In a letter sent to Abdul Razak Dawood, Adviser for Commerce and Investment to Prime Minister Imran Khan, NKATI president Faisal Moiz Khan drew attention that DLTL policy was announced for five years. It is unknown at this time what he will do after leaving the post.

The State Bank of Pakistan is not accepting the documents of the export which is going on from 1st July due to which all the Banks of Pakistan are also refusing. This issue should be resolved immediately and the policy of DLTL should be continued.

“If DLTL is skipped in the middle, it will adversely affect Pakistan’s exports and exporters will be economically disadvantaged and their export will be ruined. It is not possible to export goods as well as taxes from Pakistan, which is one of the impossibilities. If DLTL is not refunded, then it creates a negative impact on exports,” he pointed out.

He further said that it is pertinent to state that in order to improve and enhance exports from Pakistan, exporters have been given calculated facilities/incentives. The objective of these facilities/incentives is to make exports zero-rated, which means that the impact of tax paid is netted off by subsequently allowing refund or input adjustments equivalent to the tax already paid.

NKATI president said that to facilitate exporters, the Ministry of Commerce has provided the facility of duty drawback on local taxes and levies to textile, non-textile & Exporters under SRO. 711(I)/2018. Exporters’ commitment from foreign buyers will also be affected which will also cause irreparable loss to export orders.

The government should adopt a positive strategy in this regard and play its role. Despite the passage of six months’ time, no positive and coherent policy has yet emerged from the Government. Nor have the banks been informed/provided with a comprehensive policy about DLTL.

Faisal Moiz Khan was of the opinion that 17pc sales tax should be withdrawn as the raw material cost has increased tremendously and at the same time shipping freight has also increased along with an increase in cotton prices due to which financial crunch has also increased due to which it has become impossible to compete with the international market. In order to save the export industry sales tax should be zero-rated.

“At the same time, the sales tax that has been imposed on the Export Processing Zone is also inappropriate, which is likely to affect exports. If Pakistan’s exports are affected, then Pakistan will face a never-ending economic crisis due to which trade activities will stop,” he feared.

Faisal appealed to Abdul Razak Dawood, Adviser for Commerce and Investment to Prime Minister Imran Khan, in order to save the business, especially domestic exports from destruction, to continue DLTL policy. It is imperative for the Government to formulate a comprehensive and positive policy on DLTL to facilitate exporters and to inform all banks accordingly.