Lahore: Advisor to Prime Minister on Commerce & Investment Abdul Razak Dawood has assured the Lahore Chamber of Commerce & Industry (LCCI) to resolve the issues of 203 (B) and invoices soon.
“I will talk to the Finance Minister in this regard”, he assured while speaking at the Lahore Chamber of Commerce & Industry.
The Advisor said that the Prime Minister will have meetings with the Presidents of the Chambers to set the export target for the next year. “Pakistan is shifting from trading to manufacturing that is a key to economic stability.”
He said that Pakistan’s trade with Uzbekistan and the Central Asian States is very low. These countries want access to the sea and Pakistan is the most suitable country for them.
Uzbekistan has acquired 25 acres of land that will increase trade between the two countries.
He told that the government is going to sign a transit trade agreement with Uzbekistan while two flights between Pakistan and Uzbekistan will be started soon.
He said Pakistan must focus on enhancing regional trade which remains very low and must be exploited.
Calling for an increase in regional trade, he gave the example of the European Union where regional trade was 90 per cent.
Abdul Razak Dawood shared details of the agreements and MoUs concluded during Prime Minister Imran Khan’s recent visit to Uzbekistan, saying it was a successful visit.
He informed the meeting that 71 agreements were signed between the two countries. On the occasion, he also invited the businessmen to take part in the single-country exhibition to be held in Tashkent soon.
He added that economic and industrial boost was on the government’s top agenda. He assured businessmen that all problems of the industrial sector would be resolved amicably. “The Commerce Ministry is actively engaging with all relevant stakeholders to understand the issues related to trade and investment in the current challenging situation,” he added.
LCCI President Mian Tariq Misbah said that the Ministry of Commerce deserves special appreciation for the remarkable export performance of Pakistan as the Export figure for 2020-21 has crossed $25 billion.
He also appreciated that in line with the LCCI’s recommendations to reduce the cost of doing business and promote industrialization, the Government has reduced Custom Duties, Regulatory Duties and Additional Custom Duty on the import of raw materials of various industries e.g. food processing, tourism, footwear, poultry, paint, chemicals, artificial leather, paperboard, optical fibres and electronics manufacturing etc. This will certainly help to enhance the export competitiveness of these sectors.
The LCCI President highlighted the issue of the new clause 203 (B) through which exorbitant powers have been given to the Government Committee to arrest and prosecute the business community. He said that this is against the spirit of a business-friendly environment according to the vision of our honourable Prime Minister. He recommended that this clause should be withdrawn through a special amendment.
Mian Tariq Misbah said that exorbitant fines have been imposed on the importers under section (28)156 of the Finance Bill if they for any reason are not able to complete the paperwork for the redemption of their shipments. This clause is also against the spirit of a business-friendly environment and therefore it should be withdrawn.
He said that the requirement of the presence of invoices inside the containers should not be imposed on the containers which are already in transit as they were shipped before the announcement of Budget and hence do not contain invoices.
He said that Break-bulk Containers should also be exempted from the condition of the presence of invoices as it is not possible to put invoices inside the Break-bulk Containers.
The LCCI President added that in the Budget 2021-22, Advance Income Tax has been levied through clause 236G. This advance income tax (0.1%) will be deducted by manufacturers from the distributors and dealers in the following sectors i.e. pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment. Similarly, an advance tax of 0.5% is levied according to clause 236H which will be deducted by the distributors, dealers and wholesalers from the supplies made to the retailers in the aforementioned sectors. This advance tax can result in a substantial increase in prices and should be taken back.
He said that the Artificial Leather Industry and PVC Flooring Industries are facing anomalies after the Budget as the duties on their raw materials have become equal to greater than the duties on their finished products. This anomaly is hampering the local industry and needs your attention.
Mian Tariq Misbah said that the main raw materials of the Artificial Leather Industry are PVC suspension resin and fabric which are subjected to Custom Duty of 11% and 20% respectively. However, the tariff on the finished products of artificial leather i.e. woven backed coated fabrics and non-woven back coated fabrics have been reduced from 20% to 11% and from 11% to 3% respectively in the Federal Budget 2021-22.
He said that the main raw material of the PVC Flooring is the PVC suspension resin which is currently subjected to 11% Customs Duty. The Customs Duty on the finished product (PVC Flooring) has been reduced from 20% to 11%.
He said that the government has withdrawn the facility of reduced rate of Sales Tax (10%) on import of Pharmaceutical Plant, Machinery, HVAC equipment and capital goods. This would hamper the competitiveness of the Pharma sector. This facility needs to be restored.
The LCCI President said that the export of raw material copper is hampering our SME sector. No Duty on the export of Copper is levied even though it is an important raw material for many small industries related to the Engineering sector in Pakistan.
He said that the issue of the Misuse of Tax Exemptions given to the industries based in Federal/Provincial Administered Tribal Areas (FATA/PATA) on imports of raw materials remains largely unaddressed.
The LCCI has raised this issue with the State Bank that the ban on Advance Payments for Commercial Importers is making it very difficult for them to import vital raw materials and other essential components.
“We recommend that Commercial Importers should be allowed to import against Advance Payments up to $20,000.”
“It is worth mentioning that 65% of our exports go to just 10 countries. The persistent issue of the lack of sound banking channels is not enabling us to enhance our exports to potential markets like Africa, Central Asia and Russia. LCCI has raised this issue many times with the State Bank and the Ministry of Commerce. We recommend that the formal Banking Channels should be established on a priority basis”, Mian Tariq Misbah added.