ISLAMABAD: Prime Minister Shehbaz Sharif has directed the Ministry of Finance (MoF) to liquidate verified exporters pending claims of Duty Drawback of Local Taxes and Levies (DLTL) by re-appropriation as well sufficient allocations for FY 2024-25, well-informed sources in Commerce Ministry told Business Recorder.
The Prime Minister will continue to receive export sector review at least twice a month and also chair a meeting of Export Development Board (EDB).
It has also been decided that performance evaluation mechanism for Trade and Investment officers (TIOs) would be reviewed and improved to reward outstanding performance.
Exporters likely to get DLTL worth Rs37.306bn
Following directions of the Prime Minister, Commerce Minister Jam Kamal held a meeting of export facilitation committee and gave directions to the FBR, Finance Ministry and the State Bank of Pakistan to remove bottlenecks.
On issue of pending sales tax, income tax refund and customs duty drawback, Rs 250 billion and provincial refunds, Federal Board of Revenue and Finance Ministry have been directed to give full plan for clearing all pending refunds along with time lines.
On pending verified DLTL/TUF disbursement of Rs 37.7 billion, Finance Division has been directed to provide complete plan (with timelines and targets) for allocation for clearing all pending claims. Discussing rationalization of policy and Export Finance Scheme (EFS) rates, Commerce Minister has asked Finance Ministry to prepare a detailed plan (for the upcoming budget) on allocation of funds for credit financing through EXIM Bank.
Ministry of Finance, the SBP and Commerce Ministry have been directed to redesign EFS with better targeting and utilization for working capital. The three have also been asked to announce targeted long-term financing scheme for value-added sectors and enhancement of EFS for working capital.
The SBP has been asked to reconsider policy of fines on delayed export proceeds realization (exporters fined up to 9 per cent of their export proceeds in case of delayed repatriation). SBP is to formulate a plan to refine the risk management system in consultation with Ministry of Commerce, and private sector representatives to provide comments in writing.
On business community’s request to the government, in which it has been asked to facilitate utilization of 10 per cent amount held in exporter’s foreign exchange retention account without undue hurdles, the SBP is tasked to provide information on banks that have upgraded their systems for debt card transactions.
Regarding automatic revision of customs duty drawback rates, it has been decided that the FBR (Customs) would revise DDB rates in the upcoming budget based on recommendations by the industry.
The meeting has also sought full account of all pending refunds and to propose a way forward on FASTER claims. As per existing mechanism, refunds of sales tax are to be within 72 hours of submission of claim through FASTER and expanded coverage.
On proposal of continuation of SBP financing scheme for renewable energy with priority to SMEs, Finance Division to consider proposal in the light of International Monetary Fund (IMF) commitments/budgetary priorities. Finance Division will also consider re-launching of collateral free Finance Scheme (SAAF).
On the proposal of establishment of banking channels on border ports with Iran and Afghanistan for trade and transit National Bank of Pakistan (NBP) booths have already been created in Chaman and three border crossing points for Iran.
On proposal for exemption of exporters from all Federal/Provincial taxes, Cess, Levies, Super Tax and introduce fixed tax regime @ 1 per cent for all categories, the FBR has been directed to engage with private sector stakeholders directly and consider the proposal (including removal of Sindh Infrastructure Cess) for the upcoming budget.
FBR has also been directed to consider restoration of tax credit for investment under section 65 B of Income Tax Ordinance 2001. The FBR (IR) will offer comments on proposal to reduce turnover tax from 1.5 per cent to 0.7 per cent and adjust against profits realized in future directly from the exporter.
The FBR and MoF would provide comments on proposal regarding advance tax on realtors, Tajir Dost Scheme and the App meant to improve calculation method for determination for tax.
Copyright Business Recorder, 2024
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