Horticulture, rice traders seek incentives in proposed package

KARACHI: The prime minister should not ignore the horticulture and rice sectors in the upcoming incentives package for exporters, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said on Monday.

FPCCI Standing Committee on Horticulture Exports Chairman Ahmad Jawad said the incentives will not be affective until the prime minister takes ownership of exports, as policy implementation is not seen anywhere.

It is the responsibility of the Planning Commission to draft five-year business plan since the inception of this incumbent government from economy to exports. Jawad said that the incentives package should be given on all exports and not only on those export items that witnessed a decline during 2015/16 or to only the textile sector, as special attention is also being required for horticulture, rice and halal meat sectors, he added.

He expressed the hope that this time the government may not ignore the nontraditional items. “In the current scenario, the country needs multidimensional strategy for exports.” He suggested the government not to rely on one sector as was the case in the past, as this led to poor exports performance.

Prime Minister Nawaz Sharif is expected to announce Rs100-125 billion package for exporters with a major share for the textile sector, aimed at reversing the declining trend in exports, as the Commerce Ministry is not willing to accept sole responsibility for the current decline in exports.

It was agreed that a package is necessary to encourage exporters who are struggling due to international slump in commodities’ prices and incentives packages given by the neighbouring countries such as India, Bangladesh and Vietnam to their exporters.

Jawad said according to the initial draft, which sources claim is almost the final version, 50 percent rebate would be granted to exporters to be paid by the State Bank of Pakistan (SBP) at the time the foreign currency is received.

It has also been recommended that 50 percent rebate on vouchers should be given to exporters, valid only when the letter of credit (LC) for machinery is opened. It was also proposed that the government should honour its pledge date of October 15 and clear pending tax refunds of exporters, without any delay, even if it is as a bank-negotiable instrument.

However, now it has also been decided to clear the tax refund of exporters before the end of the current month. Keeping in view the hardships of the textile sector, the government is expected to announce three percent rebate to yarn / grey fabric, four percent to processed fabrics, six percent for home textile / knitwear and eight percent for garments sector, but no news to facilitate agriculture exports, an untapped sector, which could earns billion.

Similarly, removal of import duty and sales tax on industrial machinery is also on the cards, he said, adding that the duty drawback, bond and export refinance schemes will be simplified to facilitate the Small and medium enterprise (SME) exporters.

Last year, an exporters’ delegation led by then FPCCI president Mian Mohammad Adrees held detailed discussion with the prime minister at the PM office. This year, the prime minister again held negotiations with the exporters in Karachi and Lahore during his recent visits.