Hurt By Anti-Export Policies.

The second leading export-oriented sector of the country—leather sector—has warned that due to anti-export policies of the government, it may shift its manufacturing facilities to other countries—where policies are rational and practical.

Former chairman of Pakistan Tanners Association (PTA) Agha Saiddain said Friday the SRO 231 (1) 2011 could prove fatal to exports—as cost of doing business in Pakistan “has gone up and exporters find it difficult to sell their products competing with India, China, and Bangladesh.”

He said there is apprehension among leading exporters that if anomalies of SRO 231 (1) 2011 were not removed immediately; it would put a devastating impact on exports and the overall economy.

Agha said the issue is of an extremely serious nature and needs to be addressed urgently. The authorities drafted SRO 231 (1) 2011 in hurry and it carries both latent and patent ambiguities.

He said the poorly prepared drafting has created procedural anomalies and confusion at all levels—especially at Karachi Port, dry ports and airports.

The authorities at above places are awaiting clarification from FBR to release the goods under customs clearance.

The wording of SRO 231 (1) 2011 are: If these goods after import or domestic production are sold or purchased between persons registered as manufactures-cum-exporters or as exporters, for use or utilisation in goods meant for export.

The words ‘between’, ‘or’ and ‘or as exporters’ have created confusion. If a tannery, registered as manufactures-cum-exporters, buys chemical from commercial importer or local producer who are not registered as manufactures-cum-exporters or exporters then there is no zero-rating for an exporter in such case.

Similarly, if leather garment manufactures buy leather from tannery not registered as manufactures-cum-exporters or exporters—then there is no zero-rating for garment exporter in such case.

He further said the authorities should understand that exports all over the world are always free from duties and taxes.

For this reason, there are duty free shops at all international airports. If anomalies of SRO 231 (1) 2011 are not removed with immediate effect it can cause irreparable damage to our economy and Pakistan will become uncompetitive and lose market for ever taking this country to dark ages.

The tanning sector is already facing high cost of doing business, shortage of wetblue grains and wetblue split besides shortage of hides and skins as a result of smuggling of live animals to Iran and Afghanistan.

He said due to shortage of basic raw material—wetblue and supply of skin and hide, the country is losing precious foreign exchange in the form of termination of export orders, which was already on decline—up to 30 percent.

He said in view of the gravity of the situation, it has now become impossible for PTA’s members to execute their export orders on time—whereas PTA has expressed apprehensions that it will loose precious foreign exchange due to cancellation of export orders.

Source : dailytimes.com.pk