The government is reportedly giving final touches to revenue enhancement measures to be presented before the federal cabinet and National Assembly in a few days, aimed at rationalizing federal budget 2018-19, well-informed sources in Finance Ministry told Business Recorder.
Finance Ministry, State Bank of Pakistan, Federal Board of Revenue and Ministry of Commerce are almost ready to present their proposals to the federal cabinet targeted to increase exports, slash imports and increase revenue, the sources added.
In this regard, a list of around 600-700 tariff lines has been identified for which regulatory duty would be increased accounting for an estimated additional collection of $ 1.1 billion, which would help reduce the trade deficit. In addition, a ban can also be imposed on few unnecessary imported items and this proposal has been discussed during the first meeting of the Economic Advisory Council (EAC) without the three reputed international Pakistani descent economists to avoid seeking another programme from the International Monetary Fund (IMF). The government is also considering slashing the Public Sector Development Programme (PSDP) and re-appropriating funds allocated in the Abbasi-led administration's budget announced in April 2018.
According to the plan, Regulatory Duty on furnace oil, mainly used by thermal power stations, will be increased by 12.5 per cent to 14.5 per cent (from the existing 2 per cent) whereas RD on mobile phones will be raised to 17.5 per cent from the existing 5 per cent - an increase of 12.5 per cent.
The sources said RD on turning, shaving, milling waste will also be increased by 12.5 per cent (total 17.5 per cent), coil-Hr/Na-S Th- 3Mm by 12.5 per cent (total 25 per cent) while the proposed RD on Nfw hot/rolled in coils will be raised by 12.5 to 30 per cent. The RD on flat rolled products of iron Ore non alloy steel will be 17.5 per cent with the imposition of an additional 12.5 per cent.
The sources said, around 200 tariff lines with respect to raw materials of export-oriented industries are expected to be rationalised by bringing them one-slab down from the existing rates.
The government has also prepared a plan to increase exports from $ 3.5 billion to $ 4 billion during the current fiscal year through policy measures.
Well-informed sources told Business Recorder that the government will also make energy prices comparable with neighbouring countries aimed at making exports comparable with regional competitors.
The sources said the government will also approve rationalisation of 400 tariff lines besides continuing Prime Minister's export incentive package for the next three years.
The government, sources said, can fix electricity tariff at Rs 9-10 per unit for industry by removing cross subsidies. A delegation of APTMA discussed this issue with Finance Minister, Asad Umar, a couple of days ago.
There is also a proposal that gas (local +LNG) be provided to industry at an average price and to exempt industry from load shedding.
"New electricity connection to industrial units to be given within one month, lifting of moratorium on local gas in Sindh and KP and resolving GIDC issue is also on the agenda of the incumbent government," the sources maintained.
Domestic industry maintains that after payment of sales tax refunds within 100 days around $ 2 billion liquidity would become available to exporters whereas refunds of Drawbacks of Local Taxes and Levies (DLTL), approved in accordance with the Prime Minister's export package, will be released within 30 days.
A proposal allowing sales tax refund claims, DLTL and customs duty drawbacks to be paid by State Bank of Pakistan through authorized dealers immediately at the time of realization of export proceeds is also on the cards.
The sources said Ministers for Finance, Commerce and Federal Board of Revenue (FBR) are receiving representation from different Associations and organisations aimed at making the revised budget acceptable to the business community.
Chairman, Indus Motors Company (IMC) Ali S Habib met with Minister for Commerce and Industries on Monday and discussed different proposals to support domestic industry and minimize reliance on imported goods.
Pakistan Business Council (PBC) has also met with Commerce Ministry officials and has provided a detailed presentation to revive domestic industry.
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