All Pakistan Paper Merchants Association (APPMA) has said that the local printing industry has reached to the edge of destruction due to the continuation of anomalous tariff and once it closed down, will never be able to revive itself.
The APPMA has regularly submitted budget proposals for the past 20 years but proved in vain, the government has turned a blind eye to the misery of the printing and packaging industry and has particularly safeguarded anomalous tariffs to give undue benefit and protection to handful paper mills, Muhammad Anis Noor Muhammad, Senior Vice Chairman of All Pakistan Paper Merchants Association said in the Federal Budget 2020-21 proposals for Paper and Paperboard Chapter 48."Our proposals have been concerned with the prerequisite of the printing industry, which has reached to the edge of destruction due to the continuation of anomalous tariffs, whereby, printed materials (books, catalogues, packing materials, literary materials etc.) are imported at minimal rated customs duty, whereas, the paper and paperboard imported by the printing and packaging industry is charged with the highest rate of duty to make local printing and packaging industry to extremely tumble", he said.
He said additional unbalanced import tax persist on paper, as there is no duty on basis raw materials, i.e. pulp (H, S. Code 47), and nominal duty on finished goods i.e. printed books, literary materials (H. S. Code 49); however in semi-finished goods (H. S. Code 48) i.e. paper and paperboard there is 63 percent aggregate duty taxes add-on.
All Pakistan Paper Merchants Association strongly raised highest customs duty concern before the Federal Board of Revenue (FBR), Ministry of Finance, Ministry of Commerce, National Tariff Commission (NTC) but no avail however, despite of the excessive protection local mills have failed to improve the quality of their products and have further failed to meet the countrywide demand, he said, adding that the unhelpful policy of our government only benefits the handful paper mills, but restricts the growth of over 15000 printing units and supplies chain in Pakistan.
The continuation of an unbalanced/biased tariff other regional countries have managed to establish equally well-organized printing units has led to increasing imports of books prescribed in Pakistan's schools and colleges, from Malaysia, Singapore, Indonesia and China, which were once printed locally.
He said that the lack of knowledge of the policy makers for the last twenty years has increased our dependence on imports of printed materials and has affected the paper trade and printing and packaging industry harshly. Despite of the reality that the need for printed materials is every time increasing, the government has maintained the highest rates of duties on basic raw materials i.e. paper and paperboard, which the local printing industry can use to carry out the domestic demand.
In the likely event of reduction/collapse of exports it is an ultimate probability that the local products will ultimately exploit their established dominant position and shall establish a monopoly or cartel allowing them to charge exorbitant prices for paper and paperboard and articles thereof, which are not of preferred and desired quality required by the consumers.
SRO Local Paper Mills: In the Federal Budget 2018-19 the government yet again announced Sales Tax relief in copies, exercise books (stationary), All Pakistan Paper Merchants Association consider this relief open floodgate of swindle / corruption and will benefits to some local mills only, earlier the government extend sales tax relief but local mills defraud and issue fictitious sales tax invoices declares 'copies and exercise books' instead of correct declaration, sustain billions of rupees revenue pilferage. The FBR records will testify this embezzlement.
Security Paper: Security Paper H. S. Code 4802.5700 is very specialized paper not manufacturer locally, this kind of papers are those used for identification such as passports and certificates, different types of academic and qualification certificates, bank cheque as well as government documents. This also extends to stock certificates, certificates issued by financial institutions and sensitive government-issued documents. The main use of security paper is to stop people from counterfeiting. Government imposition of excessive 27 percent customs duty and additional customs duty is nastiness and rough treatment intend to security paper.
APPMA proposed the following tariff and tax structure on the various HS Codes of paper and paperboard:
Recommended Duty for Semi Finished Raw Materials (Paper):
Proposed customs duty on paper and paperboard of PCT No. 4802.5510 to 4802.5890; 4810.1990; 4810.9200;4810.9900; 4804.1100; 4811.4100; 4804.2100; 4805.1100 and 4810.1320 at the rate of 10 percent.
Additional Customs Duty: Government must abolish unwarranted additional customs duty.
Sales Tax: It is pertinent to note that excessive high sales tax make malicious business practices in the form of under invoicing and/or getting unfair rebate / refund, contributing to undocumented economy, APPMA suggested sales tax should be single digit of 9 percent without allowing and refund or rebate.
Withholding Tax: Highest WHT produce corruption and causative to undocumented economy. APPMA suggested WHT must slash to 3 percent without allowing any refund or rebate.
Muhammad Anis Noor Muhammad said it is of utmost importance that the government of Pakistan takes initiatives to put in place policy reform and act immediately as prayed above to save this industry, otherwise the printing industry once closed down, will never be able to revive itself and the flight of capital in this sector has already been in existence for the past 20 years. If promoted and facilitated by the government the traders associated with the paper trade can fulfils the need of imported paper by the printers and can facilitate the printing industry in raising its employment and can further assist the printing industry and regaining its export competence, while fulfilling the domestic need for quality printing on good quality imported paper and paperboard.
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