The year 1999-2000 can be characterised as a year of achievement and consolidation. During the year the Chairman of APTMA and the Managing Committee have to redouble efforts in developing interaction with the government providing feed back to them and help resolve the problems being faced by Textile Industry.

Some of Major achievements are as under:-

(1) Cotton
1.1 Excise Duty on Cotton
Since the government has allowed free import and export of cotton lint, then there should not be any customs/excise duty on import of cotton.

The government on our presentation has withdrawn the 15% excised duty imposed on import of cotton below 28mm staple lengths.

1.2 Local Sales of Cotton by T.C.P.
During the year textile industry has been emphasising that economic working of textile units is primarily linked to comfortable supply of raw cotton.

In 1999-2000, with the improved cotton situation, the mill working was revived. We stress the government that at no point of time this equilibrium is to be disturbed.

The government on our repeated requests introduced a major change in cotton sale policy to offset the expected losses in cotton export and directed the Trading Corporation of Pakistan to lift curb on sale of its cotton stock to the local buyers - main consumer.

1.3 Contamination free Cotton
Not only ginners but all concerned admit that seed cotton with higher content of trash and moisture is being delivered. It has been established that for bringing overall improvement in the quality cotton ginning has major role to play.

Accepting our point of view the Commerce Minister has constituted a committee for preparing action plan to ensure contamination free cotton supply to Textile Mills in the country.

1.4 We propose to the government to establish two ginning institutes in the cotton growing and ginning area to improve quality of ginned cotton.

The Federal government has approved a plan to set up a Cotton Ginning Research Institute in Multan at a cost of Rs. 110 Million, aimed at improving the quality of cotton.

1.5 Implementation of Cotton Grading
On our support, Pakistan joined the select band of major world cotton producing countries as the fourth largest producer, after switching over to staple grade pricing system to wipeout the stigma of a seller of poor quality lint to its local and global customers. A uniform grade of the local lint has been prepared by the PSI and enforced.

(2) Customs
2.1 Import of Second Hand Machinery
On our request the Ministry of Commerce has allowed the duty free import of textile machinery required for Balancing, Modernisation and Replacement. In addition, a recent decision taken under Trade Policy 2000-2001, wherein the import of more than five year old machinery was disallowed has been withdrawn.

2.2 Import of Ring Spinning Frame - Duty Free Import Allowed
Previously the duty free import of Ring Spinning Frames are not allowed, under the mistaken impression that these were being manufactured domestically and are being unfairly subjected to Custom duty @ 10%, which now has been withdrawn.

2.3 SRO 369(1)/2000 will be modified, as proposed by APTMA in the near future.

(3) Taxation - Income Tax
3.1 Income Tax exemption certificate allowed for one year
The government has decided to allow Income Tax Exemption Certificate Under Section 50(4) and 50(5) valid for 12 months, previously after every three months, we have to obtain the exemption certificate.

3.2 Tax Ombudsman
In the Finance Act, 1999, a high powered institution of Tax ombudsman was promised. We have stressed the govt. for the appointment of Tax ombudsman to take care of the complaints and impediments being faced by Assesses.

The government has now made such appointments.

3.3 Tax should be Prospective and not Retrospective
Tax payable should be prospective and not retrospective for all assesses, the government has accepted our demand.

3.4 Supreme Court/High Court Judgement on Section 80-D being implemented
Refund 80-D Allowable-Petitioner field returns for assessment year 1994-95 and 1995-96 - Benefit of economic reforms and incentive claimed - Assessing officer allowed exemption to the profit and gains but levied turnover tax - petitioner requested for waiver of charge and for refund of payment already made.

3.5 Refunds have been expedited

3.6 Tax Amnesty scheme's last date on our request have been exempted.

(4) Wealth Tax
We propose to the government that Wealth Tax Act 1963 should be abolished to encourage investment.

The government has abolished the Wealth Tax Act 1963.

(5) Sales Tax
5.1 Penalty for Delay in Payment:
Under Section 33 and 34 of the Sales Tax Act 1990, the world "shall" was inserted for imposing penalty and additional tax. Therefore any kind of delay in payment will automatically carry additional amount of Sales Tax by way of penalty/additional tax. We propose that the world "shall" may be replaced with words "shall be liable" so that adjudicating officer may have the authority of waiving penalty/additional tax in cases where delay is genuine and beyond human control.

The government has accepted our plea.

5.2 Sales Tax chain is being completed.

5.3 Sales Tax Refunds have been expedited

(6) Monetary-State Bank of Pakistan
6.1. Amendments in Export Refinance Scheme
Through the State Bank of Pakistan withdrew export financing on all types of yarn yet provided financing to bleached and unbleached cloth at 10% mark-up instead of earlier 8%. All other categories of cloth fabrics such as dyed and printed fabrics will be admissible for grant of export finance at 8%. The facility will be available until 30th June 2001.

6.2 Exchange Rate Policy
We proposed to the government that the State Bank of Pakistan should formulate a system of exchange rates whereby the country does not lose its competitive advantages in any market.

The Finance Minister in his budget speech confirmed that State Bank of Pakistan would follow an exchange rate policy that will maintain its competition in relation to market forces and inflationary differentials between Pakistan and its major trading partners.

The State Bank of Pakistan has now allowed the rupee to float against the U.S. Dollar as it advised Banks that the trading band of Rs. 52.10 - 52.30 for the green back stood withdrawn. This move by SBP is to keep Pakistan exports, competitive to counter the persistent disadvantage from the weak Indian rupee.

6.3 Project Financing for BMR
We have pointed out to the government that in spite of the Government and Textile Industry's keenness the textile industry is unable to pursue the much required value addition, due to non-availability of BMR financing, as Development Financial Institutions are unable to extend any funds to projects for BMR, and commercial banks too are reluctant to extend project finance.

The Governor State Bank of Pakistan has instructed all banks to provide finance to Textile Sector.

The Textile Industry now is expected to invest approximately US$ 1 billion this year replacing old machine new technology under BMR.

Moreover, under the Investment policy a liberal first year allowance ranging from 40% to 80% is available to new industries, and we do appreciate the introduction of provision for tax credit equal to 10% of investment in plant and machinery for new investment and investment for BMR made during two years starting from 1st July 2000. This tax credit would be in lieu of the first year allowance at the option of the tax-payer.

6.4 State Bank & Lending Institution have been convinced by APTMA of the need for adequate. Financing to the Textile Industry at low mark-up rates.

(7) Membership of Govt Bodies
APTMA was given Membership of:

* Federal Export Promotion Board
* Textile Board
* Committee to implement "Textile Vision 2005".
* National Accountability Bureau
* Habib Bank Ltd.
Mr. Mohsin Aziz nominated as director for three years in his personal capacity.

Mr. Mohsin Aziz Chairman APTMA led an APTMA delegation to meet General Pervez Musharraf, Chief Executive of Pakistan. in CE's Office at Islamabad on 14th June, 2000.

A formal meeting of half an hour turns into Casual get-to-gather for over two hours finding solution through team work and taking textile sector needs into account are a good thing for economy. The meeting was also attended by Mr. Shaukat Aziz, Minister of Finance, Mr. Abdul Razzak Dawood, Minister of Commerce, General Ghulam Ahmed, Chief of staff to the Chief Executive and Mr. Tariq Aziz, Principal Secretary to the Chief Executive.

General Pervez Musharraf who lighted the Torch of Reforms in Pakistan takes the participants into full confidence in respect of current affairs by informing everyone about everything one needs to assess the prevailing situation, and the problems of textile industry which has borne the burnt of the ill-conceived economic policies of past are discussed and a reborn hope for us who remained crushed under the debris too long has been fulfilled as the present regime desired so. The Chief Executive, General Pervez Musharraf reiterated his government resolve to revive the economy and said the role of Textile Sector is vital to economic revival. In his words "My government full realises the importance of the textile industry as an engine for economic development and growth".

The Chief Executive directed the Ministers present to interact with APTMA and Examine the suggestions and proposals and to remove problems which are agitating the textile sector.

We recall with pride than within less than couple of month, the concerned government agencies took far-reaching decisions to revive our stagnant export sector and extended its helping hand to the Textile Industry.