Prime in-ister's Advisor on Commerce, Textile, Industries and Produ-ction and Investment, Abdul Razak Dawood is all set to fight the case of industry and business community with Finance Ministry's team in Bani Gala on Sunday (today) well-informed sources told Business Recorder.
To be presided over by Prime Minister Imran Khan, both Advisors, ie, Abdul Hafeez Shaikh and Abdul Razak Dawood along with their teams will present their arguments with respect to revenue requirements and incentives for domestic industry in line with the conditionalities of the International Monetary Fund (IMF).
Earlier this week, Abdul Razak Dawood did not receive a positive response from the Revenue Division's team headed by Hammad Azhar given their ambitious revenue target of Rs 5.554 trillion which can not be achieved if tariff concessions are not withdrawn from industry. FBR has planned to withdraw subsidy and other concessions to different sectors as per revenue measures agreed with the Fund. Elimination of zero rating to five sectors is expected to hit exports at least by $ 2 billion per annum.
The Commerce Division especially, Abdul Razak Dawood who is also a businessman and on the hit list of PTI's parliamentarians for being a non elected member of Cabinet, maintains that he will not support revenue collection by culling industry. He is supportive of revenue enhancement through industrialization and not through imports.
Both the Commerce Division and the FBR have failed to achieve their targets, ie, exports and revenue. The country's exports are flat despite tall claims of the incumbent government that it would achieve the target of $ 25 billion but is now justifying why it failed, citing different reasons. Likewise, FBR has also failed to achieve revenue target and is facing a historic shortfall of Rs 447 billion.
The sources said the FBR shared its revenue plan with Abdul Razak Dawood at a recent meeting along with the measures to be taken to achieve this target, which was rejected by Commerce Division on the grounds that the existing industry will be further burdened and become uncompetitive in the international market; and with electricity and gas prices earmarked for a raise from July 1, 2019 industrial input costs would sky rocket.
The Commerce Division also presented its item-wise tariff rationalization plan along with financial impact which was rejected by FBR on the plea that the Commerce Division should then present an alternate plan to bridge the revenue gap.
The sources said, Commerce Division has finalised its tariff and non tariff recommendations for today's meeting, with the hope that it will convince the Prime Minister that concessions are necessary to ensure that industry will stand on its feet. On the other hand the FBR is unwilling to support the Commerce Division on tariff concessions but is offering concessions through DLTL and DTRE etc schemes.
"The main difference between the Commerce and the FBR is revenue generation mechanism measures. The Commerce argues that imports should not be the source of revenue as in other countries. Revenue should be generated from other sources, otherwise the fate of exports will be the same as at present," said an insider.
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