The Federation of Pakistan Chambers of Commerce & Industries (FPCCI) has demanded from the government to abolish five percent import duty on machinery and related spare parts because the duty is hindering the industrialisation and balancing modernisation and replenishment projects of export based industry.
The FPCCI suggested this in its Trade Policy Proposals 2006-07 forwarded to the commerce ministry. It suggested that in order to regularise sugar supply, the raw sugar should be imported without duty and it should be converted into refined sugar by the mills of all the three provinces.
The FPCCI suggested that for the promotion of textile garments the ministry should allow six percent research and development support to all countries irrespective of high tariff countries.
It suggested that the sales tax refund claim prior to zero rating period should be disposed off at the earliest. Refund should be allowed against the exporters stocks on which sales tax has been paid in full. The income tax rate on exports deducted at source should be rationalised downward.
It suggested that export finance rate and industrial credit rate should be cut down to affordable level. It suggested that adequate monitoring and timely intervention in frequent transportation hikes should be made a permanent feature.
The FPCCI suggested that the government should impart training to exporters on a regular basis that will make them realise the importance of marketing through modern mode of marketing techniques.
It suggested that a permanent mechanism in the commerce industry should be established to look into the cases of tariffs and trade barriers.
The federation suggested that the trade policy should be approved according to WTO standards and agreements under the FTA should be signed keeping the national interest on priority.
It suggested that the government should establish an export development bank to help in boosting up the exports and to provide specialised services to the exporters.
Engineering units should be allowed export processing unit facility on export of 25 percent of their production for the first three years. After that engineering units should be allowed this facility on export of 50 percent of their production. The export of high value added engine parts should be allowed 20 percent export incentive to boost exports.
For improving the production in rice growing areas, the grower should be provided better quality of its certified seeds and a rigorous campaign should be carried out to impart practical knowledge to the grower along with bank credit facility for them on low mark-up rates.
It is high time to abolish 0.25 percent export development fees (EDF) to boost export. And it is also suggested that the scope of freight subsidy scheme should be expanded. PIA is charging scanning charges Rs 1/- per kg on cargo shipped by air. This is part of services which should be provided by airlines /Civil Aviation Authority free of charge as is in other countries.
To encourage the new comers and small exporters it is suggested that tax relief be given to them for at least two years.
The period validity of export refinance provided by the State Bank of Pakistan should be enhanced to eight months for part-I instead of six months and two years for part-II instead of one year.
Horticulture Export should be given the status of Industry. The policy of freight subsidy on Horticulture exports should be continued so that produce can compete in the International markets. It suggested that import of pipe mills and their spare parts should be allowed from India because these are cheaper than other countries.
The FPCCI suggested that no more requirement of import of constructional steel because the local industry has increased production to four million tonnes annually.
To include in the import policy order additional items ie tanned or crust skin of sheep or lamb in dry state/ (crust) H.S. Code No 4105.3000 and tanned or crust hides and skins of goat or kids in dry state/(crust) H.S. Code No 4106.2200 should be imported from India. It also requested for the removal of embargo of India pharmaceutical machinery.
The FPCCI recommended that import of tea should be deleted from the ATTA list, reduction of import duty from 10 percent to zero, reduction of sales tax from 15 percent to 12 percent and sign more FTA's with Indonesia and preferably with East African countries.
As betal leaves being highly perishable is to be considered as 'vegetable' should not be charged such high custom duty and sales tax like vegetable as a whole. The betal leaves (vegetable) should be declared as 'Essential Commodity' instead of luxury item and so it should be taxed.
The federation proposed that the local pharmaceutical industry should be given relief in 25 percent protective duty and 15 percent sales tax that has increased prices of drugs in the country.
It suggested that import of pulp, paper and paperboard should not be allowed from India. Import of cars should be curtailed by enhancing duties and taxes.
Import duty on refrigerated containers, insulation material, generation sets 17 KVA, fork lifters, seeds and plants, ripening chambers, hot water/ vapour heat treatment plants should be waived.
The Trade policy should address the weaknesses of industrial productivity in the country. The cost of industrial production in the country has escalated enormously over the last many years. Due to the intermittent raise in the prices of petroleum, gas and electricity the cost of inputs has increased; the prices of exportable goods have gone up, rendering Pakistani exports uncompetitive in the international markets. It suggested that the cost of inputs in industrial productivity may be totally zero-rated for export based industry.
To promote industrialisation and for environmental consideration, the FPCCI suggested that all environmental, energy conservation, pollution control, recycling and all other industries using industrial and city waste as their raw material should be allowed five years tax exemption; the high tariff rates of electricity, gas and water should be reduced for industries; the private sector of power generation should be allowed for power distribution.
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