FBR says facilitation leads to significant growth in exports

ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday claimed credit for increasing monthly exports to $2.4 billion in December from $1.6 billion in August on the back of its trade facilitation strategy.

The FBR said it has devised an integrated strategy under which additional customs duties and regulatory duties on 164 items related to textile sector, not manufactured in the country, were removed in collaboration with all the stakeholders. Import duties on 1,623 tariff lines, pertaining to basic raw materials and intermediate goods were reduced to zero through the Finance Act, 2020.

“All these measures were undertaken with the objectives of neutralising adverse impact of COVID-19 pandemic, especially for the exporters, and to make their products competitive vis-à-vis those of their competitors in the international market,” the FBR said in a statement.

In December, exports rose 18.3 percent compared to $1.9 billion in the corresponding month last year.

Under the initiative of “Make in Pakistan”, duty drawback rates for at least eight sectors were revised upwards by FBR.

During the whole exercise, more than 434,000 claims were disposed of and approximately 7,800 exporters have benefited from this Initiative. Similarly, FBR has paid 90 percent more refunds of sales tax during July-December as compared to the corresponding period last year.

“This led to significant rise in volumes of exports in the form of increase in TEUs (tonnage equivalent units) / containers from 35,477 in July to 62,591 in December, showing a growth of 43 percent,” said the FBR. “In order to tangibly contribute to exports, all the export facilitation schemes were simplified / rationalised for their optimal use by the exporters.”

First of all, extension in utilisation period of different export facilitation schemes was allowed for a period of one year from 1 March, 2020 to 28 February, 2021. Secondly, retention period for plant and machinery, under the export-oriented units’ scheme, was reduced from 10 years to five years. Thirdly, for the prompt redressal of grievances, one administrative tier is reduced (under duty and taxes remission for export scheme and manufacturing bond scheme) and regulatory authority is created to facilitate the exporters.

Moreover, the investors in export processing zones have been facilitated in payment of duties/taxes on the disposal of machinery in the tariff area. These facilitation measures have led to increase in number of exports goods declarations from 71,190 in July to 79,756 in December, posting an increase of 11 percent.

Total number of exports goods declarations remained at 408,472 from July to 31 December vis-à-vis 333,943 till January, up 18 percent “To realise the objective of facilitation / promotion of exports, an automated system of filing the claim to the final sanctioning of duty drawback claims for the payment of duty drawback claims to the exporter was rolled out on 1 October,” said the FBR.

“As a matter of fact, export goods declaration filed in customs online system is considered as the duty drawback claim.”

State Bank of Pakistan credits the system sanctioned payments in the accounts of exporters online directly. In addition to the automation initiative, green channel clearances of the exports goods declaration / consignments were increased from 74 percent in July to 77.3 percent in December. Similarly, for speedy payment of sales tax refunds to exporters, Faster Plus system has been implemented. FBR has also removed regulatory duty on import of cotton yarn till 30 June, 2021, which is a basic raw material for the value-added textile industry. “Being committed to the national goal of increase in exports, Federal Board of Revenue is making all out efforts to assist exporters by continuously making improvements in its laws and procedures.”