KARACHI: Advisor to Prime Minister on Commerce, Abdul Razak Dawood, has said that the government is aiming to reduce and if necessary phase out Additional Customs Duty (ACD) and Regulatory Duty (RD) on those raw materials which are not produced in Pakistan.
Speaking at a meeting through a video link, he said that Pakistan is among the very few countries where duties and taxes on imports are a major source of revenue, and such heavy reliance on imports for revenue generation is counter-productive, particularly the tariffs on industrial raw materials.
Therefore, the Tariff Rationalization Board in collaboration with the National Tariff Commission was working on a plan to rationalize and phase out high tariffs on raw materials to support and encourage investment in industrialization and to implement changes in the budget for the fiscal year 2021-22.
According to the KCCI, he said the purpose of today's meeting was to involve the stakeholders through trade bodies and chambers of commerce to identify the sectors and raw materials which were subject to excessive tariffs and where rationalization and reduction was necessary to reduce the cost of production to make industries more competitive.
Abdul Razak Dawood, while agreeing to the suggestions given by the President of Karachi Chamber of Commerce and Industry (KCCI), Agha Shahab Ahmed Khan, said that the Ministry of Commerce was working on rationalizing of tariffs and duties in such a manner that those tariffs and duties would safeguard domestic industry rather than becoming a source of revenue generation.
Responding to Agha Shahab's suggestions, Razak Dawood, who is also the chairman of the National Tariff Policy Board, agreed that the representatives and experts from numerous other important sectors of the economy and especially from the textile sector must also become part of these meetings which should not remain confined to the presidents of chambers of commerce only.
"Initially, the ministry of commerce is analyzing tariffs and duties for textile sector which will be followed by tariff rationalization for other sectors as well in subsequent meetings which will be held in September and October," he added.
The president of KCCI said that it was encouraging to see that the ministry of commerce had been working to finalize tariff rationalization policy on industrial raw materials for the next three years which was long overdue and which would ensure sustainability to economy. The planned reforms would allow businessmen and industrialists to focus on expanding their production and exports rather than on remaining concerned with unpredictability of costs due to frequent changes in tariff structures and ad hoc measures by the FBR.
He pointed out that since Pakistan came into being, the governments from time to time had been pursuing tariff policies focused on revenue generation only which was not a wise move as the tariff structure should be devised to protect and safeguard the interests of the domestic industry to enable them to efficiently compete with imported products.
Copyright Business Recorder, 2020
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