Towel Manufacturers Association (TMA) on Thursday criticized the State Bank of Pakistan’s (SBP) decision to mark lien on the late realization of the export proceeds and called the move “absolutely unfair”.
TMA Senior Vice Chairman Syed Usman Ali expressed concern for the central bank’s FE circular No. 02 of 2023 on lien marking, and said the move “will be the last nail in the coffin of exports”.
The delayed remittance can be caused by various factors generated from the importer’s side only, ie, slow sales, delayed deliveries, delays in vessel arrivals, and a slowdown in remittance from the final customers, he explained. These are some of the many factors due to which importer delays the payments and none of these factors can be rectified by exporters alone. Even in cases of L/Cs, many times there are minor discrepancies which are identified by importers’ banks at the time of the payment,” he added.
He argued that government officials should remove the misconception that exporters delay remittances to benefit from the country’s devaluing currency. He said that all exporters put in their best efforts to return the amount as early as possible including asking the buyers to release the funds in advance to improve the cash flow.
“The exporters’ sincerity is above board, and they are playing their significant role effectively for the economy, i.e., earning valuable foreign exchange for the exchequer, generating employment, massive contribution to taxes and having huge share to generate economic activities in the country,” he added.
Usman reiterated that Pakistan’s exports are already declining, and such actions can crash the exports, struck the country in debt with huge unemployment and the whole nation might suffer because of that. He also reminded the Government about the rising cost of doing business and other problems which are making it difficult for businesses to operate.
“There are billions of rupees stuck with the FBR in terms of sales tax refunds with challenges such as cancellation of concessionary tariff regime, besides an end to the DLTL and TUF scheme and growing production cost from hyperinflation,” he noted.
The TMA Senior Vice Chairman requested the SBP to withdraw the circular, noting it was surprising that it was issued without consulting the stakeholders. He also asked the government to devise a strategy and remove restrictions on the sector to boost exports.
Source: Pro Pakistani