LAHORE: Advisor to Prime Minister on Commerce & Investment Abdul Razak Dawood has said that Regulatory Duty and Additional Duty on those raw materials will be abolished which are not being produced locally.
He was talking to the LCCI President Mian Tariq Misbah, Senior Vice President Nasir Hameed Khan, LCCI former Presidents Mian Misbah-ur-Rehman and Ch. Zafar Iqbal during an informal meeting at the Lahore Chamber of Commerce & Industry.
The Advisor said that that custom duty on those raw materials will also be reduced to make Pakistani products more competitive.
He said that banking agreements with Afghanistan and Uzbekistan are well on the way. Trade with these countries will be regularized and smooth once these agreements are finalized.
Abdul Razak Dawood said that councils are being established to give quantum jump to the exports of leather, mango, potato, kinno and dates. He was optimistic that this step would yield good results for the economy of Pakistan.
“Prime objective of the government is economic stability of the country and all out efforts are being made to achieve the desired goal”, The Advisor added.
LCCI President Mian Tariq Misbah said that the issue of a steep rise in trade deficit needs urgent attention of the Government. Our trade deficit in the period July-December 2020 stood at 12.36 billion dollars which is around 6% higher than the trade deficit of 11.67 billion dollars in the period July-December 2019.
The LCCI President said that the process of Refunds for our exporters needs to be streamlined. Recently due to a technical error in the Refunds system which resulted in wrong issuance of Refunds, notices were issued to the members of Business community and false cases were registered. He asked the PM Advisor to play a supporting role in this matter so that the business community is not wrongly victimized. Government should focus on fixing the technical problems in Sales Tax e-Refund system so that swift and transparent issuance of refunds to the exporters can be assured.
“To increase our export competitiveness across diverse sectors, the incentives which are currently provided to the export-oriented sectors should also be provided to other export sectors e.g. Pharmaceuticals, Rice, Halal Meat, Engineering etc. The Refunds of these sectors should also be processed through the new faster system”, Mian Tariq Misbah added.
He said that engineering sector holds great importance in world economy as its share in global trade is around 52%. In Pakistan, however no tax incentives are given to engineering sector. Pharmaceutical sector also holds great importance in world economy as its global trade is in excess of 600 Billion dollars (3% of global trade). Majority of the tax incentives in Pakistan are given to Textile sector whose share in world trade is just around 4%.
He said that there is a great need to improve our infrastructure in Testing Laboratories and Standard Certification to enhance our export competitiveness. He said that the rate of 17% Sales tax on the inputs of various export oriented industries is extremely high and needs to be brought down.
The LCCI President further Pakistan’s export products are heavily concentrated in textiles, rice and a few other items. There is a need to diversify our exports, especially focusing on potential sectors like Pharmaceuticals, Engineering Industry, Halal Food and Information Technology etc.
He said that All Raw Materials not manufactured locally must attract zero Custom Duties. Government must also eliminate Regulatory Duties and 2% Additional Custom Duty on Raw materials not manufactured locally to increase the competitiveness of our products. He said that Clean Room Panels are imported for use in pharmaceuticals sector and should be exempted from Sales Tax.
“It should be made sure that electricity tariff for the export oriented industries remains competitive as any tariff increase results in increasing the cost of doing business exorbitantly”, he concluded.