ISLAMABAD: Worried over the massive capital flight from industrial sector to Bangladesh, the Ministry of Commerce has taken a number of measures to cap the capital flight as well as to enhance the national tune of exports by increasing domestic industrial production.
Almost three major industrial companies namely M/s Soorty Enterprises (Pvt) Limited, M/s Naveena Exporters Limited and M/s Nishat Mills Limited transferred around $7.550 million investment to Bangladesh and Sri Lanka in last three years from Pakistan.
First company made transactions in fiscal year 2012-13 while later two companies transacted investment in the fiscal year 2013-14. All three companies had been dealing in textile industry especially in the value added products.
A well placed source at MoC told Customs Today that these companies and firms sought permission for the transaction of their investment on account of capitalization of business opportunities available in those countries.
Therefore, feeling pulse and trend of market as well as to provide a safeguard to local industry, the MoC offered a number of measures along with facilities to the local investors to stop flight of capital from the country.
For example, the source said that sales tax of five export oriented sectors namely textile, leather, sports goods, surgical goods and carpets was part of zero rated tax regime from July 1, 2016. All the pending sales tax refunds till 30th April whose RPOs had been approved, was paid by Federal Board of Revenue (FBR) as well as the existing scheme on Drawback of Local Taxes (DLTL) was continued for the current fiscal year.
Technology Up-gradation Fund (TUF) Scheme for the textile sector has been notified with effect from July last” the source added saying that the facility of duty free import of textile machinery was continued. The mark-up rates on export refinance facility, has been brought down to 3.0% as well as long term finance facility was continued at 5%.
Furthermore, the most important measure taken on the initiative of MoC is the comprehensive package for Textile sector announcement made by Prime Minister. Under this initiative duty drawback for textile sector has been specified as on Garments 7%, Made-ups 6%, Processed Fabric 5% and Yarn and Greige Fabric 4%.
“Furthermore, a number of other facilities like withdrawal of Custom duty and sales tax on cotton imports, withdrawal of Custom duty on MMF (other than Polyester) and zero rating of textile machinery imports have also been provided to the local investors in textile sector” the source concluded.