Exporters decry delay in sales tax refunds.

KARACHI -- Export-oriented industries are under extreme financial crunch and are facing losses of billions of rupees as their liquidity remains stuck due to delay in release of sales tax refunds.

'The government has stopped releasing all the sales tax refund claims whereby exporters' precious liquidity worth billions of rupees have been stuck,' Value-Added Textile Forum Coordinator Muhammad Jawed Bilwani said at a joint press conference of value-added textile associations held at the Pakistan Hosiery Manufacturers and Exporters Association (PHMA) House.

'The prime minister, finance minister and their economic team have completely ignored the export sector, mainly the value-added textile sector, which is on the verge of collapse owing to the government's anti-business and anti-export mindset,' he lamented.

The Federal Board of Revenue (FBR) has issued Sales Tax General Orders (STGO), which have caused further disruption in the processing of sales tax claims, without consultation with the stakeholder associations, Bilwani said.

Earlier, the exporters were happy with the functioning of the FBR's FASTER system, which was processing claims electronically as per law and rules without any delay.

The FASTER system was introduced to end human intervention and process the sales tax claims electronically, while the new parameters introduced in the STGO involving FBR officials will defer the sales tax claims and again open the floodgates to corruption, Bilwani remarked.

According to an estimate, approximately 60% of exporters' liquidity is lying frozen with the FBR. As a result, the textile export industry has become unviable and is on the verge of collapse.

Besides, a sharp decline in exports and foreign exchange earnings is hindering production while the country's economic managers are not giving any heed to the repeated distress calls to save the export industries facing the most difficult times in history.

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