The Pakistan Tanners Association is urging the government to include raw hides and skins in the 6th Schedule of Sales Tax Act, 1990.
Shaikh Saqib Masood, PTA's central chairman, said the leather sector is the second largest export earning industry in Pakistan with annual exports of $1.14 billion, and the leather industry is frustrated in light of anti-business policies.
"There is need to review the sales tax regime particularly exclusion of hides & skins in the 6th Schedule of the Sales Tax Act, 1990, which badly hits the export-oriented leather sector."
Masood also said that leather products like shoes, garments and bags are already subject to sales tax and as such, all local sales made from the production of hides and skins are liable to sales tax. So subjecting raw hides and skins to sales tax will have massive impacts on the export industry, creating refund issues and hardships, which impede export business flow.
Hides & skins (dry and wet), unginned cotton (phutti), cotton-ginned (lint) and cotton waste, are included in the Revised Edition - Manual of Agricultural Produce Market Committee Laws of the Provinces as Agricultural Produce.
The sector also provides jobs to more than one million people, producing top-quality leather and leather products and has the growth potential to become a $3 billion industry in next three years, according to Masood, if the government supports it.
The Pakistani leather industry also contributes billions of rupees to the national treasury through customs duty and taxes and Masood appealed to the government to consider the PTA's case so exporters can play their role to strengthen exports.