Pakistan reduces duty drawback rates

The Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) has criticised the decision of the Central Board of Revenue (CBR) to reduce duty drawback rates on exports of leather garments to 3.22%. PLGMEA chairman Ahmed Zulfiqar Hayat said the decision had been made without consulting or sharing information with PLGMEA and the agreed parameters of duty drawback calculations and appropriate input recipes had been ignored. If these had been taken into consideration, Hayat added, the duty drawback rate would not have been reduced significantly. The rate is set to be reduced from 5.17%. Hayat said the garment industry in Pakistan is currently going through a crisis with several companies closing down and thousands of workers now redundant. This decision gives the Pakistan leather garments industry no incentive for the 2006-07 period, he added. It would cause further factory closures and even more redundancies. Hayat has urged the CBR and the Ministry of Commerce to immediately intervene in the matter.