While talking to Business Recorder, Agha Saiddain said that leather sector exports are witnessing downward trend due to unfavourable conditions like load shedding, worsening law and order, rising tariffs, scarcity of raw materials, and increasing cost of business.
If corrective measures were not taken, the industry would reach to the verge of collapse, he said. He urged the government to immediately remove the 3-years’ participation condition in International Fairs from TDAP’s Rules in the light of Working Papers submitted by PTA. He also asked the government to allocate Rs 60 million (US$590,000) annually to PTA for the promotion, participation at international fairs out of EDF collection. PTA Chairman pointed out that India is holding two major Leather Exhibitions including the India International Leather Fair, Chennai and urged the TDAP to allow PTA to organise a Pakistan leather show and allocate Rs100 million (US$980,000) for holding an event for the image building of Pakistan. To induct Under Article XI of GATT export of raw, pickle and wet-blue should either be banned or 60% export duty should be imposed on the export of wet-blue, he added. He urged the authorities to define the scope, formation and structure of Leather Export Promotion Council (LEPC) as announced. Moreover, scheme for assistance, re-imbursement of 75% cost for mandatory certifications, lab testing from internationally accepted labs as was announced in trade policy 2005-06 should be extended. Saiddain said that South Korea has reduced import duty for India from 5% to 2% but this concession is not allowed on import of leather and leather products from Pakistan.

Government should take immediate initiative and request South Korea to allow same facility to Pakistan. He also demanded continuation facility of matching grant for setting-up of effluent treatment plants in individual tanneries to PTA’s remaining member tanners. He said that the incentive for sharing 25% financial cost for setting-up of labs in individual tanneries to PTA remaining member tanners should be continued. He urged the government to declare tanning industry as continuous processing industry and exempt it from power and gas load shedding. The maximum rate of customs duty should be 0.5% on all chemicals used in tanning industry. Temporary import of wet-blue and crust leather should be allowed on job work basis. Presently tanners are paying 1% income tax and 2% sales tax, he said. He also asked for retrospective revision of Duty Drawback Rates.

Source: Business Recorder Pakistan