PBC seeks time for consultation over tariff policy

KARACHI: Pakistan Business Council (PBC) on Monday sought more time to assess the possible impact of national tariff policy proposed by the government, saying one week for consultative process is not sufficient.

Last week, ministry of commerce proposed reduction in duties on several tariff lines and asked the chambers and trade associations in the country for their feedbacks on the draft by April 27. “Whilst cascading tariffs are conceptually a move in the right direction, specific impact of these on different industries requires time beyond the one week envisaged in the MOC’s (ministry of commerce) consultative process,” PBC said in a statement.

The business policy advocacy forum would like the distortions to the 2005 tariff structures, in particular through the imposition of retrogressive regulatory duty and other revenue-chasing surcharges, to be considered in detail.

“Without this there is a danger of oversimplification,” it said. “National tariff policy needs to have buy-ins from all the ministries.” The council, having 70 corporate members, said changes in the trade and tariff policies should be accompanied with steps to curb under-invoicing and smuggling, withdraw full and final tax regime and encourage capital formation that leads to scale and competitiveness and reduction in energy costs.

“A ‘Make-in-Pakistan’ approach requires the holistic alignment of policies well beyond those within the purview of the MOC,” the council said. “The PBC, nevertheless, welcomes the MOC’s initiative to outline what it can do to create jobs and promote value-added exports.”

PBC further said the new strategic trade policy framework (STPF 2018-23) should support import substitution. “The STPF should have the complete buy-in of all the relevant ministries. This would require a comprehensive policy alignment to remove the impediments undermining domestic manufacturing,” it added. “In the absence of this alignment, the STPF 2018-23 would meet the fate of failed STPFs of the past.”

The council advised that a Prime Minister-led body should oversee implementation of the trade policy. PBC said the commerce ministry should renegotiate free trade agreement with China to defer further import tariff concessions to encourage Chinese to rectify the huge trade imbalance by relocating Chinese manufacturing to Pakistan. The ministry should consider domestic jobs while pursuing trade agreements with countries, such as Turkey and Thailand.