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PTA fears duty on hides to cut leather exports further

PTA fears duty on hides to cut leather exports further

LAHORE: The Pakistan Tanners Association (PTA) has said that despite downturn in the economy since past couple of years, the government imposed duty on the import of hides and skins, which will further affect the already fragile leather exports.

In a statement issued here, Pakistan Tanners Association (PTA) Central Chairman Sheikh Saqib Masood termed the unfriendly policies of the government and severe energy crisis reason for decline in growth of this second largest export sector. He explained that leather processing was continuous process and electricity shutdowns not only cause serious damage to leather in process but also have adverse effects on its quality. Due to this serious problem, the leather sector is facing stagnation in its growth for last 6 years, he added. He said chronic stagnation of leather sector started since 2007-08 though there was an increase of 12.67 percent in export of leather and leather products in July-April 2014 but the country was lagging far behind in the region. China’s export stood at $28.17 billion in 2007-08, exports of India stood at $4.87 billion in same period, Bangladesh’s exports at $0.379 billion in same period and Pakistan’s exports stood at $1.220 billion in 2007-08. But in 2012-13, exports of China stood at $42.40 billion, India at $5.90 billion, Bangladesh at $1.3 billion and exports of Pakistan stood at $1.142 billion with a negative growth of -6.39 percent.

Government should include raw hides and skins in the sixth schedule of Sales Tax Act 1990 like cottonseed (raw cotton). Sheikh Saqib said that the sector represents as mother industry of leather garments, footwear, gloves and leather goods producing world’s finest quality leather and leather products. PTA chairman said that the leather industry having tremendous growth potential will become 3 billion dollar industry in the next 3 years if encouraging government support with provision of level playing field is ensured.

Leather industry contributes its share in billion of rupees to the national kitty regularly through payment of Customs Duty, Sales Tax, Income Tax, Withholding Tax, Export Development Surcharge, Tax on Services, Employees Oldage Benefit Institution, Social Security etc.