NKATI urges Dawood to continue its DLTL policy – Business & Finance

KARACHI: North Karachi Trade and Industry Association (NKATI) Chairman Faisal Moiz Khan has urged Prime Minister’s Trade and Investment Advisor Abdul Razak Dawood to continue the policy DLTL to save businesses, especially domestic exports, from destruction. To help exporters, the government should develop a comprehensive and positive DLTL policy and communicate it to all banks.

Expressing concern that there is no clear policy regarding local tax and levy drawback and has been discontinued from July 1, 2022 and all banks will not take any documents after July 1, 2022 in this regard.

Under which all banks will not accept any documents after July 1, 2022. If the DLTL policy is withdrawn for any reason, it will destroy business, especially domestic exports, and exporters will face financial crisis.

In a letter sent to Abdul Razak Dawood, Trade and Investment Advisor to Prime Minister Imran Khan, NKATI Chairman Faisal Moiz Khan drew attention to the fact that the DLTL policy was announced for five years.

It is currently unclear what he will do after leaving the post.

The State Bank of Pakistan is not accepting documents from the export which is taking place from July 1 due to which all banks in Pakistan are also refusing. This issue must be resolved immediately and the DLTL policy must be continued.

“If DLTL is skipped in the middle, it will negatively affect Pakistan’s exports and exporters will be economically disadvantaged and their exports will be ruined. It is not possible to export goods as well as taxes from Pakistan which is one of the impossibilities.

If DLTL is not reimbursed, it creates a negative impact on exports,” he pointed out.

He added that it was pertinent to say that to improve and enhance Pakistan’s exports, exporters had been given calculated facilities/incentives. The purpose of these facilities/incentives is to render exports zero-rated, meaning that the impact of the tax paid is offset by subsequently allowing a refund or input adjustments equivalent to the tax already paid.

The Chairman of NKATI said that to facilitate exporters, the Ministry of Commerce has provided the possibility of duty drawback on local taxes and levies to textiles, non-textiles and exporters under the SRO. 711(I)/2018. The commitment of exporters to foreign buyers will also be affected, which will also lead to an irreparable loss of export orders.

The government should adopt a positive strategy in this regard and play its part. Despite the passage of six months, no positive and coherent policy has yet emerged from the government. Banks were also not informed/provided with a full policy on DLTL.

Faisal Moiz Khan argued that the 17% sales tax should be abolished as raw material costs have skyrocketed and shipping costs have also increased making it impossible to compete with the international market, resulting in a financial crisis. No sales tax is needed to protect the export industry.

“At the same time, the sales tax that has been imposed on the export processing zone is also inappropriate, which is likely to affect exports. If Pakistan’s exports are affected, then Pakistan will face an endless economic crisis due to which business activities will come to a halt,” he feared.

Copyright Business Recorder, 2022