The Pakistan Tanners Association (PTA) is sounding the alarm over the rapid decline in the country’s leather sector exports, calling for immediate government intervention to halt the downturn. The PTA Chairman, Muhammad Mehr Ali, has made an urgent appeal to the government, highlighting several core issues that, if unresolved, could push the industry further into crisis.
In a recent meeting with senior members of the PTA, Mehr Ali directed the Federal Commerce Minister’s attention to these pressing challenges.
He emphasized the necessity of resolving these issues on a priority basis to provide a level playing field for this value-added industry, which has long been a significant contributor to Pakistan’s economy.
One of the key demands raised by the PTA is the removal of what they describe as an “irrational condition”—the requirement for a Health Quarantine Certificate at the time of exporting finished leather.
According to the PTA, this regulation is unnecessary and imposes an additional burden on exporters, hampering the sector’s competitiveness in the global market.
Another critical concern is the 2% Additional Customs Duty (ACD) on the import of cow and buffalo raw hides and skins.
The PTA argues that this duty is an anomaly, as allied sheep and goat wet blue leather, classified under the same sector, is already exempted.
This discrepancy, they assert, needs to be rectified immediately, as even acknowledged during a Leather Export Promotion Council (LEPC) meeting.
Furthermore, the PTA is urging the government to finalize the duty drawback rates for finished leather, which have been pending at the Input Output Co-Efficient Organization (IOCO) for an extended period.
The delay has caused significant financial strain on leather exporters who are already grappling with reduced margins due to the ongoing economic challenges.
In addition to this, the PTA has called for the release of pending rebate claims, sales tax refunds, and income tax claims, particularly the deferred sales tax claims amounting to approximately Rs. 2.17 billion (Pakistan Rupee).
The association stressed that these financial bottlenecks are stifling the industry’s growth and need to be addressed urgently to prevent further decline.
Moreover, the PTA Chairman has advocated for the restoration of concessional tariffs on electricity and gas for export-oriented industries, including the leather sector.
The withdrawal of these concessions has significantly increased production costs, making it difficult for Pakistani leather products to compete with those from other countries.
Mehr Ali expressed his deep concern over the potential consequences if these core issues remain unresolved. He warned that without swift and decisive action, the leather sector, which has already seen a sharp drop in exports, could face an even more dire situation.
News reported by Business Recorder
