The government has decided to provide duty drawback on local taxes and levies to textile units of Export Processing Zones (EPZs), which are not entitled to such incentive legally. The Textile Ministry has first posted a notification on its website on September 1, to provide duty drawback (ranging from 1% to 3% on local taxes and levies to the different textile sectors.

Later, the Ministry amended it on September 5, to include the units of EPZs for the facility, which are not entitled legally. The notification was again posted on the website on September 17 without any change, the Ministry sources said. It is worth mentioning that the units of EPZ are officially treated as foreign country's units and any supply of goods to these from other industrial zones of the country is deemed as export, they said.

EPZ units have already been exempted from the local taxes, then how could this facility be applicable to them. The facility to such units which are not qualified is illegal said exporters. These units do not pay for export development fund, social security, old age benefit and property taxes, while foreign exchange act of Pakistan also does not apply on them. The State Bank of Pakistan has allocated a separate country code to these units, which has been circulated among the authorized dealers in the country.