APPMA chief against import of security paper in finished printed form

Chairman All Pakistan Paper Merchants Association (APPMA) Muhammad Anis has proposed that the import of security paper in finished printed material should not be allowed.
In a letter to the Chairman National Tariff Commission (NTC) that has been aimed at urging the commission to rectify tariff anomalies on paper and paperboard which have been hurting printing industry adversely, he noted that "security paper" HS Codes 4802-5600 & 5700 used for printing cheques, shares or bond certificates, postage, revenue stamps, etc, require No Objection Certificate (NOC) from Security Printing Papers & Security Printing Press for import and print, whereas if imports are in finished printed material no NOC required and the same is cleared at 2% / 5% tariff as against 21% customs duty if import is of raw materials.
He pointed out that security printing material has been continuously imported in small and large packages and suggested that security paper in finished printed form should not he allowed as it will seriously threaten the industry.
The printing industry, which has suffered badly due to the existence of anomalous tariffs anomalous, printed materials (books, catalogues, packing materials, literary materials etc) are imported at the rate of 2% customs duty, whereas the paper and paperboard imported by the printing industry are subjected to the highest rate of duty, causing grave harm to the local printing industry.
Other anomalies subsist on paper as there is no duty on raw materials, ie, pulp and no duty on finished goods ,ie, printed books, literary materials; however on semi finished raw material ie paper and paperboard there is 53% aggregate duty taxes add-on.
He said that the domestic paper industry has limited production capacity, whereas the majority of items are imported and are subjected to 21% customs duty which includes newsprint paper, light weight coated paper, coated art paper & board, art paper used for labels for soft drinks etc, security & cheque paper, paper for the holy book, self adhesive sticker paper, cigarettes paper, facial tissue, bleached board, offset printing paper & photo copier (A-4)-premium grade, cap paper, grease-proof paper and solid bleached board.
He mentioned that although paperboard is not a luxury item, it is attracting 21% duty, which is the highest in the Asian region. China & Indonesia, the top exporters of paper and paperboard in Asia, but both countries allow import at 0(zero) and 5% duty rate, respectively.
He further noted that the present policy of our government only benefits the handful of paper mills, but they restrict the growth of over 15,000 printing units in Pakistan.
He made the following observations: Local paper mills producing low-grade paper & paperboard using 'recycle waste paper, agricultures residue (bagass) etc, due to this paper becomes insubstantial and inept, and clearly does not meet the international standard of books & printed materials.
-- Pakistan forest reserve is 5.5%, which clearly highlights the depleted reserve for wood pulp; which compels the local mills to depend on recycled waste and residue.
-- Pakistan's printing and packaging industry has high speed, state-of art printing machinery and is not capable to make use of local paper since machines abruptly break down because of tearing & bursting and mediocre (poor) printing results.
-- India exports to over 100 countries and earns it US $1.578 billion in 2014 and in 2015 its exports increased by 36% to US $2.144 billion.
-- Pakistan once enjoyed substantial export of letter heads, wedding and visiting cards, books and other printed materials, which is no longer the case.
-- The continuation of an irregular tariff and the ability of other regional countries to establish equally efficient printing units have led to increased imports of books prescribed in Pakistan's schools and colleges- from Malaysia, Singapore, Indonesia, and China, which were once printed locally.
-- Although, Pakistan is having one of the lowest literacy rates in the world, it levies the highest rate of duties and taxes on paper.
-- Due to high tax price of FOOD GRADE board numerous consumers such as confectionary, pharmaceuticals and bakeries prefer to pack eatable in unhygienic, non-food grade quality material.
-- Domestic paper industry sells a substantial part of its production without invoice and/or issues invoices as sale of "exercise books". Although it makes a windfall profit at the cost of national exchequer, it accrues no benefit to education sector &/or end users.
-- Paper industry is said to have misused the facility under S.R.O 863(1)/2007 and 670/2013.
-- Highest duty slab has allowed domestic producers to monopolise and dictate prices.
-- Imports of paper & paperboard in most countries are duty free to encourage cheap publication of books, literary materials and printing of packaging materials etc.
-- Pakistan textile exports were affected due to one of major reasons-the high cost of packaging materials and poor quality of local packaging product.
-- A recent study also reveals Pakistani children have started wearing glasses from the age of 7 years because harmful paper harms their eyes.
-- He urged the NTC to take initiatives to put in place policy reforms and act immediately to save this industry; otherwise, the printing industry once closed down, will never be able to revive itself. In fact, flight of capital in this sector has been persistent for the past eight years.