PM invites incentives’ proposals from business community to boost exports

ISLAMABAD: Government on Friday showed its eagerness to lend further support and give incentives to the export-oriented sector in a bid to boost exports.

Prime Minister Shahid Khaqan Abbasi invited incentives’ proposals from chambers of commerce and industry across the country. “All the chambers of commerce should come up with a comprehensive plan as to how the government can further help them and suggestions regarding increasing exports within a rational timeframe,” Abbasi said in a meeting with a delegation of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

“The government would continue providing every possible support to the business community for strengthening and putting in place a conducive and business friendly environment.” Government announced a Rs180 billion in a trade enhancement package in January to encourage exporters to raise exports by 15 percent till the end of the current fiscal year of 2017/18.

The package, primarily incentivising key textile sector that accounts for over 60 percent of the country’s exports, required exporters to increase exports by five percent from January to June 2017 and then by further 10 percent in FY2018 to avail zero sales tax and customs duty on machinery and cotton import.

The objective was to prop up export-oriented sector that saw more than a 12 percent decline in exports between 2013 and 2015. Besides, the government is settling long-pending billions of rupees in refund claims, while it allayed the most irksome concerns of industries related to energy shortage that in the past took a toll on industrial production.

Government promised to add 10,000 megawatts into the system by next year and another 30,000 MW within the next few years. The trade enhancement package is expected to increase exports by $2.5 to 3 billion by the end of June 2018.

After a downward trend in the past couple of years, exports are showing recovery as government took measures, including provision of tax incentives, to encourage exporters amid much-needed foreign exchange reserves.

In July-November, exports rose 11 percent to $9.03 billion. “The FPCCI delegation, headed by the chambers’ president Zubair Tufail, also expressed optimism about overall prospects of growth in the economy, as well as revival of exports, which are showing a robust growth of over 10 percent and are further expected to grow due to rupee adjustments against foreign currencies,” a statement said. “The delegation appreciated a decision of the government related to currency adjustment, which they said would help exporters significantly.”

Rupee lost at least five percent in the consecutive three sessions as analysts said the central bank let the currency depreciate – a move that was termed as ‘welcome’ by the International Monetary Fund.

Revenue collection by the Federal Board of Revenue (FBR) also posted a growth and it is expected that FBR will be able to achieve its revenue targets in FY2018. Advisor to Prime Minister Haroon Akhter also attended the meeting. Matters pertaining to enhancement of country’s export came under discussion during the meeting.