‘Regulatory duty unlikely to cut import bill’

KARACHI: Regulatory duties on 731 tariff lines may not help the country reduce burgeoning import bill until the government creates conducive business environment, a senior industry official said on Saturday.

“Past experiences related to such levy revealed that such measures had failed and resultantly the import bill was increasing gradually,” Arshad Jamal, chairman of Customs Committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said.

Federal Board of Revenue (FBR) has been imposing regulatory duties on imported goods since 2007. The government introduced regulatory duty on more than 500 items in the budget of 2017/18 fiscal.

Yet, the import bill surged to $53 billion in the last fiscal of 2016/17. It climbed 22.19 percent to $14.26 billion in the first quarter of the current fiscal year.

The in-depth study of the notification through which government imposed regulatory duty revealed that several items are not manufactured or produced locally so such items would continue to be imported into the country, Jamal said. The import of such items would find alternate ways, such as smuggling. FPCCI supports regulatory duty at higher rates on non-essential items and those which are locally produced.  “But the government should categorise things before imposing the levy,” he added. “For example baby diapers and electrical things are not produced locally but those are necessary and no measures can discourage imports of such items.” Jamal said a day earlier a meeting of customs standing committee was held and it observed that billions of rupees refunds are still stuck and industry is facing immense liquidity problems.

“The government should focus on conditions to improve local manufacturing,” FPCCI official said. “Recent additional levy on raw materials used for manufacturing of various products would also increase the cost of manufacturing.”

He further said the overnight implementation of regulatory duty created panic among the business community ahead of shipments scheduled before October 16. “There are about 1,000 such containers on which the customs authorities are applying new rates,” Jamal said. FPCCI is convincing FBR to relax the new rates at least for shipments that arrived till October 17.