Prime Minister approves Textile Policy 2020-25 under which exports will increase to $28bn
Prime Minister Imran Khan has approved the country’s first-ever Textile Policy 2020-25. Under this, the government aims to icrease Pakistan’s textile exports up to $28 billion in five years’ time.
In order to achieve this target, cotton production in the country would be increased from 9 million bales to 20 million bales till the year 2025.
Adviser to the Prime Minister on Commerce and Textile Razak Dawood tweeted that the Prime Minister has in principle approved the Textile Policy 2020-25 and it would be forwarded to the federal cabinet for approval.
The draft of the new Textile Policy shows that electricity and gas taxes will be fixed for the next five years at US Cent 7.5 per KWh and $6.5 per MMBTU. It also indicats that withdrawal of Zero Rating or SRO 1125 would be reviewed.
Under the textile policy, the formation of Specialized Economic Zones (SEZs) will be ensured to improve exports by providing Plug and Play facilities.
Pakistan is one of the few countries having a complete chain from farm to fashion. Its textile sector is the biggest employment generator.
The official of the Textile Ministry said that the withdrawal of Zero Rating or SRO 1125 has created a liquidity crisis for the exports sector. Zero Rating was withdrawn to collect sales tax from domestic sales.
“It was assured to the export industry that sales tax refunds under the FASTER system will be paid in 72 hours. However, the system has completely failed and billions of rupees of refunds are stuck in the system”, Razak said.
He said that the set target of $28 billion textile exports cannot be reached until the liquidity crisis of the textile sector are not resolved.
The textile policy also highlights that through the Finance Act 2013, the government had raised the General Rate of Minimum Turnover Tax under Section 113 of the Income Tax Ordinance 2001.
About the skill development, the policy mentions that the textile industry is Pakistan’s largest industrial employer. The industry employs about 40pc of the total labour force.