Government to offer tax breaks to industries to improve outbound trade
A 36% increase was also seen in garments shipment.
Abdul Razak Dawod, the prime minister’s adviser on commerce and investment, has stated that in an attempt to improve outbound trade, the government is looking to offer tax breaks to industries having export potential.
While talking to a news outlet, he further told that an export policy is in the planning and will be made public next month. The aim of the government is to surge the current exports to over $20 billion a year so that the foreign exchange earnings increase.
“I am in favor of limited time-bound incentives,” Dawood said in an interview with Bloomberg.
He leaned in favor of a three – to four- year period for tax breaks. Opposing the concessions for the textile industry by saying, “They have gone to the point that it is a drug.”
Textile makes up 60% of Pakistan’s current exports. The State Bank’s goal with this new plan is to offer low-cost credit to export-oriented industries to bring variation in that basket.
“If we want to go to $100 billion or $200 billion exports like Malaysia or Thailand, you ain’t gonna do it on textiles,” said Dawood.
A 36% increase in garments shipment:
Rupee devaluation and duty cuts made Pakistan’s exports, specifically textiles, a lot more competitive. A 36% increase was also seen in garments shipment.
“It means that we are getting market share, we are taking somebody’s market share.”
Pakistan has shown improvement in the first five months of the current fiscal year, as imports decreased by 18% and exports went up by 5%, resulting in a decrease in the trade deficit by 33%.
Dawood envisions outbound shipments growing to $24.5 – $25 billion this fiscal year. This figure last year stood at $23 billion.
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