Pakistan’s value-added textile & garment sector threatens closure

by Apparel Resources News-Desk

09-July-2019  |  2 mins read

Pakistan Garment Factory
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Following the imposition of 17 per cent sales tax by the Pakistan Government, manufacturers of value-added textiles and apparels have reportedly underlined that continuance of the 17 per cent sales tax would leave no options for them but convert their concerned mills and manufacturing units into warehouses, as per media reports.

Notably, exporters are working on very nominal profit margin of 3-4 per cent.

With the imposition of 17 per cent sales tax, the financial burden on exporters will multiply many times making it unviable to run industries, maintained the country’s manufacturers at a press conference, which included Pakistan Readymade Garment Manufacturers and Exporter Association Chief Coordinator Shaikh Shafiq, Towel Manufacturers Association of Pakistan Chairman Moin A. Razzak, Pakistan Cloth Merchant Association Chairman Abdus Samad, Pakistan Knitwear and Sweater Exporters Association Former Chairman Kamran Chandna and Pakistan Cotton Fashion Apparels Manufacturers & Exporters Association Former Chairman Khawaja Usman.

The exporters reportedly added that under the given circumstances, operating industries were not conducive and some exporters/industrialists were thinking to convert their industries into warehouses and put their investments in the banks (which were offering up to 13 per cent interest) instead.

They also expressed concern over the uncertainty caused by rupee depreciation, 31 per cent increase in power and gas tariffs and unavailability of yarn, which they said might lead many industries to relocate to other countries.

They cautioned that if the Government did not address their issues and remove uncertainties on war footings, industries would shut down, resulting in mass unemployment, reduction in foreign exchange earnings and increase in trade gap.

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