Tax exemption for all exports, 3pc refinance rate proposed

http://www.thenews.com.pk/print1.asp?id=53250
By thenews correspondent 4/28/2007

KARACHI: Saqib Naseem, Vice President Karachi Chamber of Commerce and Industry, attended the 58th meeting of the Advisory Council of the Ministry of Commerce, which was chaired by Asif Ali Shah, Federal Secretary for Commerce and discussed the Chamber’s suggestions for the Trade Policy 2007-08. KCCI suggested that in the Trade Policy 2007-08 all sectors of export must be exempted from all taxes. Export refinance rate should be reduced and SBP should decline it up to three percent and cap it for five years. Utility charges for all export-oriented industries should be reduced and capped for five years. New markets like South and Central America, West Indies and Bahamas should be explored. New exporters should be encouraged.Encouragement is necessary for diversification and promotion of value added items of sectors such as Chemicals, Dairy Farming, Electrical & Capital Goods, Energy Sector, Engineering, Fisheries, Food Processing, Fresh Fruits & Vegetables, Furniture, Gems & Jewellery, Handicrafts, I.T., Hi-Tech Logistics, Marble & Granite, Marine Processing, Meat & Poultry, Mining, Petroleum Products, Pharmaceutical, Research & Innovation and Tourism.R & D support should be provided to all sectors. Safeguard of Pakistani exporters in shipment of goods was also discussed and to avoid malpractices in this regard KCCI suggested that one full set of original carrier B/L be issued for each respective export shipment and be directly delivered to the exporters on submission of authority letter from the authorized exchange dealer, as per chapter xii rule 11 of SBP, Circular 23, dated 19-02-1992 should be withdrawn, Audit of all B/L for shipments from Pakistan be done by customs/DG Ports and shipping to check that the SBP rule 11 is being implemented, freight forwarders’ role must be defined in consultation with the exporters/stakeholders.To safeguard the small exporters, carrier bill of lading should be issued to the exporters as per chapter xii rule 11 of foreign exchange act of SBP and freight payment/charges be directly credited to the license agents of the carrier/shipping line. KCCI also suggested that exporters are made to contribute to approximately 36 heads, like social security, E.O.B.I, worker’s welfare fund, Education Cess/fund etc. Government must take remedial steps to give relief to exporters from these heads. It is proposed that a five years moratorium be implemented.KCCI demanded that according to current Import Policy 2006-07, import of iron and steel in small size is banned and it allows import of only specific width & length. Import of steel sheets irrespective of size should be allowed.KCCI further demanded removal of ban on import of stock lots of paper & paperboard, reduce import duty on paper waste, Import of Second hand machines like Spray Plant and Embossing plates as well as spares should be allowed. The chamber sough zero rate of duty on chemical imported by leather industry.The proposal also stated that either the import and other protective duties /territorial restrictions on all packaging materials, pharmaceutical production and quality control (qc) machinery should be brought down to zero percent or the prevailing export rebate should be increased to 13percent.It also stated that according to current Import Policy Procedure 2006-07, there is a positive list of 1076 items that are importable from India. This list is subject to amendments/addition. Instead of a positive list of items importable from India, a negative list of items that cannot be imported from India should be maintained.In the textile related proposal it stated that R & D support amount be given to exporters at the time of the arrival of remittances and the documentation procedure involved in it must be simplified.R & D support rate be enhanced to at least 10 percent for five years for all sectors, backlog of sale tax amount must be refunded without further delay, pending claims be paid within 90 days of submission.On the leather sector it was suggested that excluding the export of meat, export of live animals be completely banned or an export duty be imposed on the export of live animals. This measure will safeguard the dwindling leather sector of the country.Agriculture & food sector related proposals states that to encourage export of halal food and to increase Pakistan’s share in world market, government of Pakistan should establish halal food authority, need to develop mechanism to process imported un-processed moong, urid, masoor etc into daals, and then they be exported in consumers packing up to 25 kilogrammes bags under brand names, export of whole gram, moong must be discouraged. Duty free import of agro commodities should be allowed in Pakistan from Afghanistan which can be exported all around the globe and 35percent regulatory duty on export of whole pulses or processed form be removed.It also said that stern rules of D.A terms not only eliminated many small and medium sized exporters but has also blatantly affected on increase of A.U.P of basmati rice. Production of basmati rice is decreasing and it is not viable to continue its exports on D.A basis when the same quantity can be sold against L/C at sight. Export of rice should be banned on D.A basis.