Tanners urge government to help leather sector

The government in Pakistan has not yet imposed the VAT rise but the leather and leather products industries want to continue the policy under which textile, leather and leather goods, surgical goods and carpets are all currently exempted from VAT.
The national government is said to be considering imposing VAT on these industries following a directive from the World Bank.
Gulzar Firoz, chairman of the PTA said at a recent PTA meeting that the leather industry is also facing a 29% decline in exports. He, along with other senior figures from the industry, called on Mansoor Ali, director of the central bank (State Bank of Pakistan) to respond to him with some support concerning the continued decline of leather exports.
Firoz also highlighted the obstacles confronted by the leather industry in sustaining exports. Details of the problems and suggested proposals were agreed at the meeting and will be sent to government authorities particularly the ministry of commerce. The proposals will also be incorporated in to the PTA’s trade policy for 2009-10.
Shahid Mahmud, chairman, PTA (South) also highlighted the poor infrastructure found around the Korangi industrial area near Karachi. In particular, he stated that it had inadequate roads, security, drainage etc, which may deter foreign customers/buyers from visiting the tanning cluster.
Gulzar Firoz also expressed his desire to get a number of key incentives for the leather industry in Pakistan to reduce and reverse the declining export trend. The PTA would like the following incentives put in place to help the export-led sector:

1. Increase duty drawback rates on leather & Leather garments preferably on par with the neighbouring countries exporters
2. A 25% air freight subsidy on leather
3. The mark-up rate on export refinance be reduced by up to 5%
4. Duty free import of spare parts.