Commerce Ministry has reportedly decided to get into a fight with Federal Board of Revenue (FBR) to bring down tariffs on import of machinery and raw material to offset trade diversion effects, well informed sources told Business Recorder. "Commerce Ministry is of the view that an import-related SRO should be transposed to normal tariff in such a manner that it does not increase duty burden," the sources added.
Commerce Ministry has cited the examples of the following SROs;(i) SRO 575 which relates to modernising agricultural machinery and equipment, export- promoting industries such as marble cutting, textile machinery, etc, other important items included in this SRO are effluent plants;(ii) similarly SRO 565 is for leather/footwear and textile machinery. The contents of this SRO should be transposed without any increase in duty and ;(iii) SRO 567 includes raw material for industries such as poultry, pharmaceuticals and life saving medicines such as those for blood diseases, and heart problems which are not manufactured in Pakistan. It will not be appropriate to levy duty on these products; (iv) SRO 809 which allows import of textile machinery at zero duty. If duty is imposed on textile machinery, it would discourage import of machinery.
According to sources, Commerce Ministry argued that FBR while implementing 100/20 principle may not shift any SRO item to the next single slab in tariff rather it should be shifted to the next lower slab of tariff. Tariff may be brought down to offset trade diversion effects.
According to an official statement, Commerce Minister Engineer Khurram Dastgir presided over a meeting regarding revision in the trade-related SROs in order to provide maximum relief or convenience to exporters. MoC will also propose amendments into the Foreign Exchange Manual of State Bank of Pakistan which is in place since decades and is not providing complete facilitation to exporters in the modern trade and investment system.
Commerce Ministry will make proposals for trade facilitation for the 2015-16 budget and to discuss strategies for the Strategic Trade Policy Framework (STPF) III which will be announced after the budget this year.
The minister said the trade facilitation measures proposed in the budget will be followed by a detailed implementation mechanism so that traders may receive benefits from those measures instantly. He said the MoC is proposing measures to liberalise Pakistan's trade and investment regime which will have a fruitful impact on country's economy. The meeting also decided that MoC will conduct a study to analyse the successful trade facilitation models introduced by other countries in the region having relatively similar economic conditions and learn from their experience.
The meeting also decided that there is a huge potential to increase exports in the services and agro-food sectors; therefore, measures will be proposed in the STPF III to provide a boost in exports in these budding sectors. The meeting also decided to introduce measures to remove hurdles in the transit trade to Central Asia.
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