EDB asks FBR to reduce WHT to two percent

The Engineering Development Board (EDB) has recommended the Federal Board of Revenue to reduce withholding tax from 5 percent to 2 percent on import of raw material for steel industry in the next budget, it was learnt.
The process to formulate recommendations initiated under Competitiveness and Efficiency Improvement (Budget 2008-09) exercise which was completed here at the EDB with proposals of reducing duties on import of raw material to bring down the prices of finished goods at affordable level.
Sources said that EDB had agreed to reduce withholding tax to two percent from existing 5 percent on the import of raw materials, steel billets and hot rolled coils being imported by steel sector in the wake of high prices of steel in the international market.
A handout said that the EDB has completed the budget 2008-09 exercise, finalising its recommendations. A meeting of convenors of 20 sectoral committees held under the Chairmanship of CEO, EDB reviewed and approved the proposals received from stakeholders. A separate committee was formed to review SROs. Prominent industrialists of the relevant sector were nominated convenors and members of these committees.
While providing sufficient tariff incentives through cascading the local industry and foreign investors, the emphasis remained on making the industry more competitive through facilitation rather than providing undue protection.
The meeting observed that certain industries ignore their production efficiencies unattended wastages both material and energy grossly affect their cost of production making them uncompetitive. It is important that the cost of duties and taxes need to be weighted against these inefficiencies.
The committee called upon the industry to shift emphasis to high value added goods in order to reduce the import cost for industry through proposing lower tariff on such material.
The committee also examined existing duty structure, available under various SROS on the import of raw materials, sub-components, components, assemblies, sub-assemblies, plant, machinery and equipment not manufactured locally, in the wake of elimination of TRIMS. It also reviewed execution of SAFTA and other Preferential Free Trade Agreements (PTAS/FTAS) and status of local industry. The meeting identified loopholes in SROs to discourage their unfair use. It noted discrepancies, anomalies and problems faced by the industry during the implementation of SROS. The proposals were sent to EDB by electrical capital goods, home appliances, heavy engineering goods, machine tools, lifting equipment, light engineering goods, pharmaceuticals, food processing, packaging and printing machinery, renewable energy equipment, cutlery and surgical goods sector, wires and cable manufacturers, electronic industry, paper and paper board products, chemical, plastic and other based products and automobile sectors.
Earlier, CEO in his address of welcome underlined the need of keeping the cost of inputs low in order to address the problem of increasing prices so that the interests of the consumers could be protected.