The crisis in Pakistan due to the refusal of tanners to buy raw materials
The Pakistan Tanners Association (PTA) said its members have decided to stop buying local hides in protest against government actions to impose more stringent taxes on them.
The new fiscal year began in Pakistan on July 1, and the government rejected requests to ease the tax burden for five export-oriented industries, including leather. Even more, the sales tax exemption was abolished for the raw materials they use (there was a zero tax rate). In addition, all imports are now subject to sales tax of 17%.
Having received confirmation of the new information, PTA convened an emergency meeting and decided to stop purchasing local raw materials. They hope that the prospect of accumulating unused skins at high summer temperatures on the approach to the Eid al-Adha festival, which will take place on August 11 or 12 this year, will prompt the government to think again.
The amount of hides in Pakistan, usually purchased in preparation for the festival, is worth millions of dollars and that will be a significant damage to the local economy.
In a statement, the PTA indicated that 1 million jobs in Pakistan depend on the leather industry.