KARACHI: All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association (PFVA) has proposed withdrawal of 10 percent FED on juice industries, exemption of import duty on spare parts used in the processing of juice industries and allocation of Rs 100 million for Research and Development to get the new Kinnow varieties.
According to PFVA proposals for budget FY24, sent by Waheed Ahmed Patron in Chief to the federal government, the Pakistan’s Kinnow industry is worth of Rs 130 billion; however its export declined to $110 million from $220 million as Kinnow variety is 60 years old while the global practice is to change variety after 25 years.
The existing variety is engulfed with various diseases leading to reduction in its shell life and therefore it cannot withstand a longer transit time of 15 to 45 days. Of the total export of fruits and vegetables, Kinnow contributes 30 percent. Currently there are 250 Kinnow factories in the country and 0.25 million workforce is employed. If the government can manage to develop new varieties, then the Kinnow export can be enhanced to $350 million within 4 years. Therefore, PFVA has asked for an allocation of Rs 100 million for R&D to develop the new Kinnow varieties to enhance exports.
PFVA has also proposed withdrawal of 10 percent FED on juice industries. According to PFVA, with the implementation of 10 percent FED on juices in the supplementary budget of February 2023, industry sales in March and April have plunged by 45 percent.
The sales of the formal packaged juice industry had been projected to grow to more than Rs 70 billion. However, now the sales are projected to be around Rs 43 billion. The decline in sales has led to the industry being unable to utilize its installed production capacity, with no new investment made or planned for 2023-2024.
This shrinking business size will have an unfavourable impact on sales tax revenue and the overall allied industry, leading to unemployment while also negatively impacting fruit farmers linked with it.
The imposition of 10 percent FED is impacting affordability of the products produced by documented players, resulting in a large proportion of consumers shifting to low-priced, low quality and possibly unsafe alternatives offered by the undocumented sector, which is almost 20 percent of the industry size. Therefore, there is a need to withdraw 10 percent FED on the juice industry.
PFVA has proposed that mushrooms growing in own land in Pakistan whether fresh, frozen or otherwise preserved in bottled, canned or packaged should be exempted from sales tax.
Currently 75-80 percent mushrooms are importing from China and other countries for our consumption in bottled/ canned packing, so in order to encourage local grower to remove the sales tax on local sales on fresh, frozen or otherwise preserved in bottled, canned or packaged should be exempted to discourage the imports and save foreign exchanges.
According to PFVA, the DPP has revised its charges for issuance of the phyto sanitary certificate to export consignments from existing charge of Rs. 300 per phyto-certificate to Rs. 2500 effective from 14th Sep 2020. Therefore, Phyto-Sanitary Certificates charges to be revised downwards to a reasonable level.
To enhance shelf life of the products, aseptic packaging bags are used and these bags are not locally manufactured and hence the processing units have no other choice but to import the bags.
Mango pulp, apple concentrate, Kinnow concert, Guava Pulp, Carrot Pulp beetroot concentrate & peach pulp, Banana pury, Tomato Paste, etc., are mainly packed in the Aseptic Bags.
Due to the high cost of aseptic bags, there is a trend in the industries to use preservatives to increase the shelf life to one 1 year while use of aseptic bags increases the shelf life to two years maintaining the quality of the products. The import duty should be exempted for Aseptic bags used in pulp industry.
Copyright Business Recorder, 2023
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