LAHORE: Advisor to Prime Minister on Commerce and Investment Abdul RazakDawood has said that Regulatory Duty and Additional Duty on those rawmaterials will be abolished which are not being produced locally.

He was talking to the LCCI President Mian Tariq Misbah, Senior VicePresident Nasir Hameed Khan, LCCI former Presidents Mian Misbah-ur-Rehmanand Ch. Zafar Iqbal during an informal meeting at the Lahore Chamber ofCommerce and Industry.

The Advisor said that that custom duty on those raw materials will also bereduced to make Pakistani products more competitive. He said that bankingagreements with Afghanistan and Uzbekistan are well on the way. Trade withthese countries will be regularized and smooth once these agreements arefinalized.

Abdul Razak Dawood said that councils are being established to give quantumjump to the exports of leather, mango, potato, kinno and dates. He wasoptimistic that this step would yield good results for the economy ofPakistan.

“Prime objective of the government is economic stability of the country andall out efforts are being made to achieve the desired goal”, The Advisoradded.

LCCI President Mian Tariq Misbah said that the issue of a steep rise intrade deficit needs urgent attention of the Government. Our trade deficitin the period July-December 2020 stood at 12.36 billion dollars which isaround 6% higher than the trade deficit of 11.67 billion dollars in theperiod July-December 2019.

The LCCI President said that the process of Refunds for our exporters needsto be streamlined. Recently due to a technical error in the Refunds systemwhich resulted in wrong issuance of Refunds, notices were issued to themembers of Business community and false cases were registered. He asked thePM Advisor to play a supporting role in this matter so that the businesscommunity is not wrongly victimized. Government should focus on fixing thetechnical problems in Sales Tax e-Refund system so that swift andtransparent issuance of refunds to the exporters can be assured.

“To increase our export competitiveness across diverse sectors, theincentives which are currently provided to the export- oriented sectorsshould also be provided to other export sectors e.g. Pharmaceuticals, Rice,Halal Meat, Engineering etc. The Refunds of these sectors should also beprocessed through the new faster system”, Mian Tariq Misbah added. He saidthat engineering sector holds great importance in world economy as itsshare in global trade is around 52%. In Pakistan, however no tax incentivesare given to engineering sector. Pharmaceutical sector also holds greatimportance in world economy as its global trade is in excess of 600 Billiondollars (3% of global trade). Majority of the tax incentives in Pakistanare given to Textile sector whose share in world trade is just around 4%.

He said that there is a great need to improve our infrastructure in TestingLaboratories and Standard Certification to enhance our exportcompetitiveness. He said that the rate of 17% Sales tax on the inputs ofvarious export oriented industries is extremely high and needs to bebrought down.

The LCCI President further Pakistan’s export products are heavilyconcentrated in textiles, rice and a few other items. There is a need todiversify our exports, especially focusing on potential sectors likePharmaceuticals, Engineering Industry, Halal Food and InformationTechnology etc.

He said that All Raw Materials not manufactured locally must attract zeroCustom Duties. Government must also eliminate Regulatory Duties and 2%Additional Custom Duty on Raw materials not manufactured locally toincrease the competitiveness of our products. He said that Clean RoomPanels are imported for use in pharmaceuticals sector and should beexempted from Sales Tax.

“It should be made sure that electricity tariff for the export orientedindustries remains competitive as any tariff increase results in increasingthe cost of doing business exorbitantly”, he concluded.