The Commerce Ministry is reportedly trying to take customs tariff determination powers from Federal Board of Revenue to give it to National Tariff Commission (NTC), sources close to Secretary Commerce told Business Recorder.
The sources said the Cabinet, while approving three-year Strategic Trade Policy Framework 2012-15, also endorsed a proposal of the Commerce Ministry on strengthening the NTC.
The Cabinet approved a proposal by the Ministry of Commerce to revamp existing trade dispute settlement mechanism. The Cabinet has approved the establishment of Trade Dispute Resolution Organisation in Trade Policy 2006-7. The organisation however could not be established. Reviewing the challenges Pakistan is facing on account of poor standards, image as a low quality producer it proposes to set up a Trade Dispute Organisation, which will act as an attached department of the Ministry of Commerce. This new office will provide assistance to Pakistani exporters and importers against fraud in international trade. The new office will be provided administrative and adjudicating powers so that it can take swift actions in matters of international trade disputes.
The NTC plays a pivotal role in providing protection to the domestic industry and providing impetus through tariff adjustments to domestic industry to grow. This role has been assigned to the Ministry of Commerce/NTC through Rules of Business, 1973. However, there are capacity constraints for NTC to work efficiently due to financial and human resource issues, the sources added,
The following measures have been proposed for the consideration and approval of the cabinet: (i) pension for NTC employees: Currently, NTC employees do not have the facility of Government pension as they are not part of system of Federal government pension system; lack of pension acts as a de-motivator for the employees. Therefore, it is proposed that pension system may be introduced in NTC in consultation with the Finance division; (ii) 50 percent salary increase; NTC job is technical in nature. In order to attract quality human resource, it is proposed that NTC employees should be given 50 percent of the basic pay as a special incentive; (iii) expanding the Institutional capacity of NTC; in order to enable NTC face the emerging challenges of complex protection matters and increasing issue and export subsidies in India, two new working units are proposed to be created, ie, Industrial Price Monitoring and Analysis Unit and Special Unit on Agricultural issues. Each Unit would be headed by a BS-20 officer supported by two BS-19 and 4 BS 17/18 officers. Half of the posts in both the Units would be encadered for Commerce and Trade group. NTC has currently three members. In order to bestow technical expertise, it is proposed that one seat of the member may be encadered for Commerce and Trade service; (iv) Currently, FBR plays a determining role in tariff adjustment. Final role of determination of tariff should be rested with the NTC as Rules of Business provides that Ministry of Commerce should be responsible for tariff measures for protection purposes. Providing this role to NTC will ensure that tariffs are applied keeping in view the needs of the industry and not on the criterion of revenue generation. It is proposed that a Committee headed by Deputy Chairman Planning Commission, with Secretary Finance, Secretary Commerce, Chairman FBR as its members, propose the necessary amendments in this regard; (v) in order to ensure that NTC has fiscal autonomy to perform its functions smoothly, there is a need for a fund that can be used by NTC. It is proposed that 10 percent of the receipts of NTC would be put in this Fund to provide a development resource to NTC. This will eliminate the ad-hoc system of funds allocated to NTC. The funds would be managed professionally for NTC similar to EDF fund managed for promotion of exports; and (vi) allowing foreign visits to NTC officials; NTC officials have to make foreign visits in relation to their work especially work related to trade defence laws demand visits abroad. Therefore, it is proposed that visits of NTC officials abroad may be placed in "mandatory visits" so that smooth functioning of the work of NTC can be ensured.
With regard to augmenting human resource, the Commerce Ministry argued that there were seats reserved for Commerce & Trade group officers in NTC for performing jobs with policy and technical perspective. However, these seats were abolished later on. The abolishment of these seats led to weakening of NTC since regular C&T officers had the perspective of working in Ministry and dealing with tariff matters.
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