Commerce Minister Humayun Akhtar Khan said on Tuesday that departure of five major sectors of the economy, including textiles, from sales tax regime will boost their liquidity and save them from unnecessary hassle. He was addressing the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) managing committee here at a hotel. FPCCI president Chaudhry Muhammad Saeed and former president Tariq Saeed were also present on the occasion.
The minister said these sectors will not be subjected to sales tax and customs duties. Small and Medium Enterprises (SMEs) will benefit the most from zero-rated regime, he added.
"In my opinion the sales tax refund system was the most disturbing issue of export-oriented sectors. The first step has been taken in this regard and this will improve the liquidity of these sectors," Humayun Akhtar noted.
He said other export-oriented sectors will also come under zero-rated regime by enhancing its purview.
Referring to withdrawal of import duty on spare parts of machinery, he said it will greatly help industrial units and now the machinery and spare parts can be imported duty free. In my opinion this is a major concession to industry, he observed.
He said SRO 410 will remain in place to enable temporary imports of machinery and raw materials as it is necessary for smaller industry. This will be withdrawn only if all sectors come under zero-rated regime, the minister stated.
He said the budget aimed at further tariff rationalising.
He was of the view that exports cannot be enhanced unless imports (of capital goods and raw materials) are facilitated.
He said car imports will increase after new slabs of duties, while increase in depreciation will reduce import duties on second hand cars under baggage and gift schemes.
He pointed out the government did not want to shock car assemblers, therefore, complete opening of car import was not possible.
To a question, he said the federal government has launched a company for developing new industrial zones. This will also improve infrastructure in the existing industrial zones, he added.
The minister advised industrialists to benefit from existing financing facility of the State Bank and the EPB, which provides fixed mark-up loans.
He said under the free trade agreement (FTA) with Sri Lanka, major Pakistani export items will have zero duty access an this market.
Referring to FTA with China, he said Pakistan will have zero duty access in Chinese market in next five years.
Humayun said the cabinet has taken decision to use import trade prices (ITPs) to check under-invoicing, which was hurting local industry.
He was of the view that the budget has taken care of tariff issues and, therefore, the trade policy will deal with cost of doing business in the country, infrastructure development, sectoral development, human resource and research and development of products.
To a question, he said Pakistan's struggle to get Generalised System of Preference (GSP) Plus in European Union was in progress with concerted efforts.
We resorted to a comprehensive fight and this will enable Pakistani products to get zero duty access into EU market, he noted.
He said the President and Prime Minister were involved in trade diplomacy and we hope to get this status.
Earlier, FPCCI president Chaudhry Muhammad Saeed in his welcome address highly appreciated the budget and said it cannot be better than this.
He said about 60 percent of the recommendations of business community have been incorporated in the budget. We are very happy with tax proposals, development budget and concession given to various economic sectors, he added.
He said the budget has extended zero rating to five major sectors, which will greatly help the business community.
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