ISLAMABAD: Minster for Commerce Jam Kamal has directed Federal Board of Revenue (FBR) to review demands of exporters regarding Super Tax and Final Tax Regime, and communicate areas where flexibility exists to facilitate exporters and reduce their burden, well-informed sources in Commerce Ministry told Business Recorder.
To deliberate/resolve issues raised by exporters in the third meeting of the National Export Development Board (NEDB) held on July 22, 2024, a meeting took place on August 6, 2024 in Commerce Ministry. Minister for Industries and Production/ National Food Security and Research and Minister for Petroleum participated in the meeting along with representatives from the Federal Board of Revenue, Sui Northern Gas Pipelines (Ltd), and Sui Southern Gas Company; however, Minister for Finance and Revenue and Minister for Power could not join due to prior commitments.
Secretary Commerce apprised the participants that during the third NEDB meeting, the Prime Minister had directed that issues raised by the exporters should be resolved by the concerned Ministries/ Divisions within two weeks and unresolved issues would be taken up in an internal meeting at the Prime Minister’s Office.
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Several issues/ demands of the exporters made in the third meeting of NEDB were discussed and deliberated with a view to their resolution.
According to sources, the issues created through imposition of Super Tax were discussed threadbare during the meeting. Representative of FBR stated that the Finance Minister, in the third meeting of the NEDB, had remarked that Super Tax is not a new tax. It was previously not implemented due to High Court’s orders. He further added that High Court order only partially suspended the Super Tax.
On proposal regarding restoration of Final Tax Regime, representative of FBR mentioned that Final Tax Regime was imposed in the light of consultation with exporters.
The Ministry of Commerce explained that this has been a consistent demand of exporters and it was taken up in the Committee on Export Facilitation, which sent its recommendations to the Finance Division before the budget.
Commerce Minister, who presided over the meeting, directed that FBR may review exporters’ demands vis-à-vis Super Tax and Final Tax Regime and communicate areas where flexibility exists to facilitate exporters and reduce their burden.
Offering comments on demand of rice sector for its inclusion in the Export Facilitation Scheme, representative of FBR stated that all export sectors are eligible for Export Facilitation Scheme, including the rice sector, subject to meeting the eligible criteria.
The meeting directed FBR to communicate inclusion of rice sector in Export Facilitation Scheme which shall subsequently be shared with the Rice Export Association of Pakistan.
During discussion on allocation of gas as per demand of winter and summer, it was explained by the Petroleum Minister and Sui Northern Gas Pipelines Limited that the main issue is of gas pricing rather than availability. There is a difference in gas pricing between the North and South regions due to different blending ratios of local system gas and imported RLNG.
Minister for Industries and underscored the need for cost-competitive prices of inputs for export industry including gas and electricity.
Minister for Petroleum highlighted the need for incorporating imported RLNG in the gas mix due to insufficient local supply. He stated through the policy of correct and uniform pricing of gas, proper allocation can be achieved. Afterwards, provision of cross subsidy for industry can be considered, as appropriate, in consultation with Ministry of Finance.
Minister for Petroleum apprised that this is a policy decision to be considered at the level of Federal Cabinet.
It was decided that the policy of uniform pricing of gas shall be recommended by the Committee and uniform pricing of gas shall be recommended by the Committee for the consideration of the Prime Minister. In this regard a brief outlining the issues and proposed way forward may also be shared with Ministry of Commerce to be enclosed along with other recommendations for consideration of the Prime Minister in light of his directives.
During discussion, the Minister of Industries and Production mentioned that a fully functional Special Economic Zone is available with requisite infrastructure and utilities. A Committee is also working on this subject and the minutes of that Committee can be incorporated in the report that will be sent to the Prime Minister.
The recommendations of the concerned committee(s) will be shared by MoI&P for incorporation in the report for the Prime Minister.
The Committee said that opportunities of relocation of Chinese industries to Pakistan should be explored by removing internal bottlenecks. Minister for Investment and Minister for Industries and Production stated that the subject of relocation of industries is being examined, including sectors that are interested. It was also noted that the management consultancy firm, Kearney (with P3A) is also conducting a study on the issue.
The recommendations of committee for relocation of Industries shall also be incorporated in the report for the Prime Minister. The Chair urged the finalisation of the report of the Committee.
To increase fish exports, there is a need to resolve issues with provinces to explore the markets of EU and US; Minister of National Food Security Research mentioned that his Ministry is actively working on facilitating the exports of food items including strengthening of regulatory bodies such as Department of Plant Protection and Animal Quarantine Department. Minister for Commence informed that some representative from the fisheries sector also met Ministry Commerce and shared their proposal.
Ministry of National Food Security and Research was tasked to provide a concise report on ongoing work for these issues.
On R&D required for creating new and climate resistance seed varieties of citrus and banana, Minister for National Food Security and Research mentioned that development of new technology and research is being done by Pakistan Agriculture Research Council.
Minister for Commerce added that Pakistan Horticulture Development and Export Company (PHDEC) is already engaged with growers and facilitating the sector in this regard.
The issues like further enhancing limit of Export Financing Scheme beyond Rs 230 billion, enhancing credit disbursements under Long Term Financing Facility, policy of wheeling for export industry and urgent resolution of power outages in Karachi and redressal of complaints against K-Electric could not be taken up since the concerned Ministries/ representatives from the Ministry were not present due to prior commitments. Additionally, some points related to Ministry of Industries and Production could not be covered in the meeting due to non-availability of the concerned officials.
Copyright Business Recorder, 2024
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