The Federal Board of Revenue (FBR) is likely to reduce the number of general tariff slabs from 5 to 4 and review all concessionary Statutory Regulatory Orders (SROs) of customs duty including SRO565(I)/2006, SRO 678(I)/2004, SRO.656(I)/2006 and other concessionary notifications for reduction or withdrawal of customs duty on different sectors in budget (2016-17). Sources told Business Recorder here on Wednesday that the ongoing budget preparation exercise has focused on tariff rationalisation plan.
Under tariff reforms, maximum general slab of 25 percent was reduced to 20 percent. The number of general tariff slabs was also reduced from 6 to 5 in last budget. There is a likelihood that the general tariff slabs would further come down from 5 to 4 in coming budget.
Sources said that the FBR will retain exemptions in cases where sovereign guarantees have been given or promotion of manufacturing-cum-exports activities in the country. The third phase of SROs withdrawal is expected to take away most of the concessions and reduced rates of duty available under said customs SROs.
In last budget, the concessions and exemptions available under SRO 565(1)/2006 were revisited and the same were either withdrawn or maintained by reducing the extent of concessions. E&P sector availed duty and tax concessions under SRO 678(1)/2004 on import of plant, machinery and vehicles. This SRO was revised in the last budget. Sources added that the Concessions available under Fifth Schedule to the Customs Act 1969 have been reviewed.
Another official said that the high powered committee to review SROs has only convened one meeting at the FBR House during budget preparation exercise. However, ministries and divisions have yet not received any notice of the second meeting of high powered committee. Moreover, the FBR''s meetings with stakeholders are underway. It is expected that the next meeting of the high powered committee to review SROs would be convened on availability of Finance Minister Ishaq Dar.
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