ISLAMABAD: A meeting of the Senate Standing Committee has expressed concern over regulatory duty being used by the Federal Board of Revenue (FBR) as revenue measures and if it is so then how the industry would be protected.
Chairman of the Senate Standing Committee on Finance Saleem Mandviwalla during discussion on the Finance Bill, 2023, on Wednesday, stated that the RD should not be used for revenue instead it be used for production and protection of domestic industry.
The issue surfaced following member custom Surraiya Ahmed Butt member custom policy remarks that there would loss of Rs4.5 billion on account of one tariff line reduction/removal with regard to used cloths. She added that FBR would suffer loss of Rs4.5 billion and reduction of 152 RD lines would cost the revenue of Rs5.5 billion.
Upon this, a senior official of the Commerce Division stated that in the last policy board meeting, the FBR was recommended to reduce the RD of 596 lines on compliance of the international commitments. The Commerce Division official said that the in 2019, the tariff rationalisation was assigned to the Tariff Commission Board which was not consulted by the FBR with regard to AIDP tariff proposals.
The meeting reviewed the proposed changes in the first schedule to the Customs Act, 1969 (Pakistan Customs Tariff). Senior officials from the National Tariff Commission (NTC), the FBR, and Ministry of Commerce presented their insights regarding the rationale behind the proposed amendments.
The meeting reviewed clause-by-clause of the proposals and changes in customs duties for various items and raw materials with the chairman emphasizing the importance of ensuring that any relief or concessions provided to businesses in terms of duties should be passed on to the customers through a decrease in prices.
He also stressed the need for a complete picture to be presented regarding the sales tax and income tax concession, if any extended to these businesses.
Expressing his views on regulatory duties, Mandviwalla highlighted that they should not be utilised as a revenue-generating measure. Instead, their purpose should be to promote fair trade practices and protect domestic industries.
Copyright Business Recorder, 2023
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