close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
August 7, 2020

Govt trying to balance tariff rationalisation with revenue generation

Business

August 7, 2020

KARACHI: The government is working out ways to rationalise tariffs on industrial imports, while keeping under consideration that taxation on imports is a main source of revenue, commerce adviser said on Thursday.

Adviser to Prime Minister for Commerce Razzak Dawood said the commerce ministry is rationalising tariffs and duties in such a manner that they safeguard the domestic industry rather than becoming a source of revenue generation.

“Pakistan is among the very few countries where duties and taxes on imports are a major source of revenue and such heavy reliance on imports for revenue generation is counterproductive, particularly the tariffs on industrial raw materials,” said Dawood.

The adviser was meeting with presidents of various chambers of commerce to discuss initiatives of the tariff rationalisation board, via a video link, according to a statement from the Karachi Chamber of Commerce and Industry (KCCI).

The board was constituted to review and introduce reforms in the tariff structure of various imported raw materials and to rationalise tariffs. The government has been working on the plan for the last two years.

The government aims to reduce and phase out additional customs duty and regulatory duty on those raw materials, which are not produced in Pakistan, said Dawood who is also chairman of the National Tariff Policy Board.

“Tariff rationalisation board plans to rationalise and phase out high tariffs on raw materials to support and encourage investment in industrialisation and implement the changes in the budget for next fiscal year,” he said.

The commerce adviser said the representatives and experts from numerous other important sectors of the economy and specially the textile sector must also become part of the meetings, “which should not remain confined to presidents of chambers of commerce only”.

“Initially, the ministry of commerce is analysing tariffs and duties for textile sector, which will be followed by tariff rationalisation for other sectors in subsequent meetings which will be held in September and October,” he said.

KCCI President Agha Shahab Ahmed said the ministry of commerce is working to finalise tariff rationalisation policy on industrial raw materials for the next three years, which is long overdue and will ensure sustainability of economy.

“The planned reforms will allow businessmen and industrialists to focus on expanding their production and exports rather than remaining concerned with unpredictability of costs due to frequent changes in tariff structures and ad-hoc measures by the FBR (Federal Board of Revenue),” said Ahmed. “Duties on the imports of raw materials have to be drastically brought down in order to enable the local industries to efficiently compete with imported products which, if done, would surely improve production capacity, encourage industrial expansion, generate employment opportunities and prove favorable for the economy.”

The purpose of the meeting was to involve the stakeholders through trade bodies and chambers of commerce to identify the sectors and raw materials which are subject to excessive tariffs and where the rationalisation and reduction is necessary to reduce cost of production and making the industries more competitive.