“To save the leather supply chain”. This is what the president of the Pakistani tanners association, Anjum Zafar, is asking the government of Islamabad. The risk is that the industry will collapse. The origins of the deep crisis would be primarily structural, starting with the exclusion of tanneries from the refund procedure due to the decline in exports. To these, the coronavirus emergency, with its repercussions on the economy, must be added.
Save the supply chain
As recorder.com reports, Zafar explained that leather exports have been experiencing a major decline for some time. The lack of income is not, however, compensated by the government as in the past. In particular, Zafar denounces the exclusion of companies in the sector from the new DLTL (Drawback of Local Taxes and Levies) scheme. The scheme has been in place since July 2018, and will be until June 2021.
Government recently revised it. The measure provides for a refund on paid taxes by companies that do not record an increase in sales abroad, or a contraction. The pandemic has made the situation worse.
Zafar denounced that, in 2019, exports of leather and leather products were already down by 23.61%. So far, the contraction recorded in 2020 compared to 2019 is -27.01%, with a peak of -40% in September. “Some factories – warns the tanners’ president – have already closed down”.
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