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Dar unveils package to jack up exports

Dar unveils package to jack up exports

ISLAMABAD: Finance Minister Ishaq Dar extended support package to cover nine value-added non-textile products to boost exports.

The announcement is expected to accelerate exports to European countries under the GSP Plus status. Winding up his budget speech, Dar said that drawback for local taxes and levies is to be given to exporters on FoB value of their enhanced exports if these increase beyond 10 per cent over last year’s exports.

Contrary to the three rates in the previous textile package, the government has given a single rate of four percent on exports from the nine sectors.

In the textile sector, the highest rate is 4pc on garments while lowest rate is 1pc on processed fabric exports.

The sectors, which will enjoy support, include leather manufacture, footwear, sports goods, surgical, engineering goods, furniture, meat and meat products, fish products and cutlery. Collective export of the nine sectors is between $5 billion and $6bn.

The support package for textile and non-textile products is often misused under over-invoicing. Meanwhile, Federal Board of Revenue Chairman Tariq Bajwa said that no major changes were made in the finance bill announced in the budget. He said almost all taxation measures were approved.

The Senate recommended 133 amendments in the finance bill. However, the National Assembly partially or completely accepted 57 amendments. The remaining 49 relate to other ministries.

The finance minister also said that the parliament is empowered to make changes in the tax rates or introduce any new tax. No SRO related to taxes would be issued by the FBR, he added.

The minister said that SROs worth Rs570 billion would be phased out in three years. Of these, SROs worth Rs103 billion would be phased out in the first year. However, exemption on petroleum products and fertilisers would continue, he said.

The rate of general sales tax on import of tractors was also reduced to 10pc to bring it at par with the rate on domestic sales. In the budget, the government proposed 10pc sales tax on local sales and 17pc on imported tractors.

The minister said the incentive package for Fata would be for five years from July 1 to June 30, 2019 for industrialisation.

He added that the incentive package on processing industries announced for Balochistan and Malakand Division would also be available for industries in Fata.

The rate of tax on international air ticket for both filers and non-filers will be 4pc. Earlier, it was 3pc for return filers and 6pc for non-filers. Sales tax on solvent extractors has been reduced from 17 to 16pc.