Pest Analysis of Textile Sector in Pakistan

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lower rate of sales tax of 4%-6% on local supplies. Textile exports stood at $12.5 billion fromJuly 2010 to May 2011. During the current fiscal year, the tax department collected Rs. 10.5billion as 1.0% withholding tax. Similarly, textile industry contributed Rs. 2.5 billion at the rateof 0.25% as Export Development Fund (EDF). Break-up shows that the applicability of lower rateof 4%-6% sales tax on local supplies would contribute an additional amount of Rs. 11billion,annually, to the national exchequer. Moreover, the collection of withholding tax amounted toRs. 10.5 billion during ongoing fiscal year.c. Economic Stability

Growth in Textile sector has immensely contributed towards economic stability of the country.This sector alone employs 15 million work force of the country. Moreover, when the finishedgoods are domestically available, it helps keep prices down and fluctuations due tointernational market influences are less likely to strike populace.d. Improvement in Balance of Payments

Textile industry has brought structural changes in the pattern of foreign trade of the country.Today, the Textile sector account for about US$ 10.2 billion export of the country. On one hand,this sector helps reduce import bills of textile products and on the other hand, it contributes inearning foreign exchange thereby helping towards keeping balance of payment in control.Following table presents a comparison of years 2008-09 and 2009-10 with respect to exports of different textile products.e. Agricultural Development

Development in Textile sector greatly affected the agricultural development in turn. It isevident from the fact that if number of textile mills increased from 3 to600 and spindles from about 177,000 to 805 million respectively in 1947 to 2010 then cotton –

bales increased from 1.1 million bales in 1947 to 10 million bales by 2010. Increased demand of cotton contributed towards better life of farmer by offering greater market for the rawmaterial.f. Greater...
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