Pakistan: PLGMEA submits budget proposals
Mr Fawad Ijaz Khan, chairman of the Pakistan Leather Garment Manufacturers & Exporters Association (PLGMEA), has presented the proposals of the country’s leather garments industry for the Federal Budget 2011-2012 to the government. The leather garments exports industry is facing several challenges and if the government does not pay any heed to the needs of this industry then widespread closure of leather garments exports units is feared.
The Federal Budget is expected to be presented on May 28, 2011.
Mr Ijaz Khan requested the Federal Board of Revenue (FBR) to revise the duty drawback rate on exports of leather garments and leathergoods in consultation with the PLGMEA. The FBR has been revising duty drawback rates on exports of leather garments and leathergoods without PLGMEA consent for the last five years and the rates announced by FBR are very low when compared to realistic rates determined by PLGMEA.
Mr Ijaz Khan also urged the finance ministry to allocate funds for schemes announced for leather garments as well as the leather industry in the Trade Policy 2009-12. Several export promotional schemes for the industry are pending due to a shortage of funds.
Mr Ijaz Khan reiterated the proposal to grant blanket permission of 5% on last year’s export quantity to be given to exporters for importing accessories used in the production of leather garments meant for export. This 5% limit may be segregated into quantities of different types of accessories.
Other proposals for the Federal Budget include providing a 25% subsidy on the electricity bills of the leather garments and leathergoods exporters, allowing zero percent mark-up to leather garments and leathergoods exporters, reducing the mark-up rate of the Export Refinance Scheme to 3% for the leather garments and leathergoods Industry, exempting the plants and machinery used in leather and leather garments production from customs duty as well as sales tax, reducing the withholding tax on exports of leather garments and leathergoods from the current 1.15% to 0.5%, abolishing the provincial infrastructure tax imposed by the Sindh Government and abolishing the withholding tax of 1.15% on the import of chemicals, raw leather, wet blue and finished leather.
