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December 2, 2019

Free of duty

Newspost

 
December 2, 2019

According to some media reports, the government is mulling over a scheme to encourage remittances by overseas Pakistanis through official channels. The proposal is to allow an import of duty-free electric vehicles of up to 3000cc to those the expatriate Pakistanis who remit at least $100,000 over two years. It is good that the government is seriously working on encouraging the transfer of money through official channels using incentives but allowing duty free import of vehicles may backfire.

First, such a scheme would be vulnerable to misuse by the rich and powerful. In the past, perhaps in the 1970s, the government of the time introduced a gift scheme where every overseas Pakistani could send or bring along a vehicle as a gift for his parents. This scheme was grossly misused. Maybe, the government should explore other avenues or possibilities of allowing breaks that help the economy. A person who has $50,000 a year to send back home must be well-off. The government can give incentives to such individuals to import duty free machinery to set up small or medium sized industry. There is immense potential in food processing, small manufacturing, agri-business and cottage industries. Allowing tax free import of machinery and equipment for small to medium business can provide the desired incentive to those who remit money to Pakistan, but also help strengthen the economy. This exercise can encourage setting up small industries that would generate employment and produce products that we currently import further lessening the import bills. We need to discourage imports of consumer goods and finished products, and focus on developing our industry at all levels.

Raja Shafaatullah

Islamabad

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