The Karachi Chamber of Commerce and Industry (KCCI) has proposed that category of industries other than textile which import industrial raw material, accessories and are registered with the sales tax for three years be allowed to import raw-material and successors at zero-rated custom duty, sales tax and withholding income tax.
The chamber further suggested that such industries be supported with multiple and fast track incentives in consultation with each industry for latest growth of export based products and they should be treated as preferred customers of Central Board of Revenue (CBR).
The KCCI in its export policy suggestions for the year 2006-07 pointed out five sectors namely, food, engineering, packaging, IT computer, telecommunication and pharmaceutical industries need immediate support of government for achieving their share in the international market.
The chamber noted that Export Development Fund (EDF) is deducted from the income of all exporters who export their products from Pakistan around the world.
In order to provide conducive and comprehensive environment to exporters and to boost their annual aggregate productivity particularly their exports, government should introduce some incentives regarding the deduction of 0.25 percent EDF to exporters by laying down some rules in this regard.
The chamber noted that leading textile exporters who export their textile products to leading American brand, top retailers in USA and in the European Union namely Wal-Mart, Target, K-Mart, Sears Stores, Family dollar-USA, Dollar General , Federated Store, and other stores, brands on the recommendations of concerned trade association, have to comply to their requirements, both quality as well social compliance, in order to come up to the requirement of their approved venders. In this regard, exporters have to bear an additional cost apart from the product cost.
The chamber suggested that in order to compensate the additional cost (compliance cost) accrued to these exporters the government should give relaxation to them by exempting them from the payment of EDF.
The chamber proposed that in a bid to boost aggregate export of the country scoters like gems and jewellery, marble and granite, meat ands poultry, marine processing, pharmaceutical, food processing, fresh fruits and vegetables, handicrafts, chemicals, furniture, petroleum products, energy sector, logistic sector, tourism I.T, mining, engineering, research and innovation electrical and capital goods and Hi-tech sectors need encouragement.
The chamber noted that Pakistan has signed Early Harvest Programme with China and it has also signed Free Trade Agreement (FTA) with countries like Malaysia, Sri Lanka etc. Similarly, SAARC member countries have also ratified SAFTA as well. However, Pakistan must take into account what the country is going to offer as export goods to these countries in return.
It is therefore due to this reason as well as to boost the growth and efficiency of exports, the government should pay attention to above sectors by consulting exporters belonging to these sectors in a bid to identify the problems which they face vis-à-vis their respective products. Internal Trade Barriers should also be identified and removed and the government should accommodate exporters of these sectors as a gesture to encourage growth of all exports.
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