State Bank of Pakistan Governor Dr. Shamshad Akhtar said the Government was making consistent efforts to strike balance between inflation and financial reforms to ensure the objectives of industrial progress. She was addressing a joint meeting of Pakistan Textile Exporters Association (PTEA), Faisalabad Chamber of Commerce and Industry (FCCI) and Trustees of Faisalabad Dry Port.

She said export refinance facility was unique to Pakistan as no country in the world was providing this incentive in this manner. Basic objective of the export refinance was value addition. However, export refinance was in turn fomenting inflation. She lauded the role of textile exporters and said they were earning precious foreign exchange for the country. The Government was implementing prudent policies to arrest inflation in addition to gearing up the pace of industrial development.

About the research and development (R&D) funds, she said that incentives were usually abused. We have identified 3,000 cases of misuse of R&D facility. Such attitude has negative impact on our economy. However, she assured to resolve the genuine problems being confronted by the business community.

Exporters have alleged that the Central Board of Revenue (CBR) is fleecing them in millions of rupees by deducting 1% income tax on exports at gross amount of proceeds. With growing tough competition in the world market in post-quota era exporters are looking for every penny they could save to keep them afloat.

The exporters have strongly demanded that 1% withholding tax should by charged on net amount of export proceeds and not on gross. They further suggested that the income tax at 1% and the export development surcharge (EDS) at 0.25% should be deducted on FOB (freight-on-board) and not on CIF (cost, insurance and freight) and C&F (cost and freight) basis.

Zahoor Ahmed of All Pakistan Textile Mills Association (APTMA) said that there were many such costs, which were causing unnecessary financial burden on exporters, who are presently fighting a war of survival.