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 Lahore Chamber of Commerce & Industry (LCCI) President Mian Tariq Misbah, Senior Vice President Nasir Hameed Khan, LCCI former Presidents Mian Misbah-ur-Rehman and Chaudhry Zafar Iqbal during an informal meeting at the LCCI, the Lahore Chamber’s spokesman confided to media here on Saturday.
The Advisor said that that custom duty on those raw materials would also be reduced to make Pakistani products more competitive.
He said that banking agreements with Afghanistan and Uzbekistan were well on the way, citing that trade with these countries would be regularized, once these agreements were finalized.
Abdul Razak Dawood said that councils were being established to give quantum jump to the exports of leather, mango, potato, kinnow (citrus)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,” he added.
On this occasion, LCCI President Mian Tariq Misbah said that the issue of a steep rise in trade deficit needed urgent attention of the government. “Our trade deficit in the period July-December 2020 stood at 12.36 billion dollars which was around six per cent 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 the exporters needed to be streamlined. He mentioned that 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 urged the PM’s Advisor to play a supporting role in this matter.
“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 could be ensured”.
“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 had great importance in world economy as its share in global trade was around 52 per cent. In Pakistan, however no tax incentives were given to engineering sector,he said.
Pharmaceutical sector also held great importance in world economy as its global trade was in excess of 600 billion dollars (three per cent of global trade). Majority of the tax incentives in Pakistan were given to textile sector whose share in world trade was just around four per cent,he said.
He said that there was a great need to improve infrastructure in testing laboratories and standard certification to enhance our export competitiveness. He said that the rate of 17 per cent sales tax on the inputs of various export-oriented industries was extremely high and needed to be brought down.
The LCCI President said Pakistan’s export products were concentrated in textiles, rice and a few other items. There was a need to diversify the exports, especially focusing on potential sectors like pharmaceuticals, engineering industry, halal food and information technology etc,he said.
He said that all raw materials not manufactured locally must attract zero custom duties. Government must also eliminate Regulatory Duties and two per cent additional custom duty on raw materials not manufactured locally to increase the competitiveness of Pakistani products. He said that clean room panels were 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.