Chairman of the Pakistan Tanners’ Association, Mr. Muhammad Mehr Ali, in a media statement, drew the attention of the government by explaining the present plight of the Industry, which is getting from worse to deteriorating gradually (day by day) and now standing at the verge of closure of its operations in Pakistan because of some fatal basic problems as summarised below if not resolved by the Government with immediate effect for the survival to this vital export-oriented Industry of the country, who are contributing significantly to the country’s GDP growth:-
The Government has recently imposed MORE NEW TAXES on this Industry in the Federal Budget 2024-25, which were earlier relaxed while the Industry is already over-burdened with the Duties/Tariff resulting in already un-viable and New Invasion of Duties/Taxes becoming the Industry “Out of the Park” specialy from International market for securing the export orders for finished leather.
New Duties Details 1) 2% ACD on H.S. Code 4107.1200,4104.1100, 4107.9200,4106.2100, 4106.2200, 4112.0000,4113.1000, 4104.1900, 4105.2000, 2830.1010 etc. etc., & 5% RD on HS Code 3909.5000.
The Industry is facing an acute shortage of financial capital, which is already in the Government’s kitty & approximately accumulated amount of the Industry is Rs.2.5 Billion payables to this Industry on account of Sales Tax, Duty Drawback claims, Income Tax, Differed Claims etc., which is rendering our member exporters UNABLE to continue their business operations and strongly apprehended to consider to close their operations. In contrast, some units have closed down owing to financial instability. A detailed request letter has already been sent to the Chairman, FBR, Governor, and SBP for the release of funds to the industry for its survival.
Removal of 1% FTR is also a setback not only to this Industry but to the rest of the export industries of Pakistan with the imposition of additional Tax @ 29%, which is completely irrational for further unrest in the country’s export industries.
Immediately announce the “reinstatement” of the DLTL Scheme @ 5% irrespectively for “Finished Leather” with all allied Codes #
MOST IMPORTANT: To allow the Concessional Tariff of Electricity and gas to export-oriented industries, including the Leather Sector of Pakistan, to be eligible before March’23.
The Chairman, PTA, Mr Muhammad Mehr Ali, highlighted the industry’s potential to generate foreign exchange through export orders. He urged the Honourable Finance Minister, Chairman, FBR and Governor SBP for immediate resolution of problems, especially the removal of Irrational “Addl., Customs Duty” @ 2% on import of basic Raw Materials & vital chemicals to the Industry.
In conclusion, Mr. M. Mehr Ali, Chairman of PTA, articulated a strong “Appeal” to consider removing unnecessary obstacles to enable this vital Industry to play its due effective role in strengthening the country’s exports with the increase of exports of finished leather.
