The newly appointed Secretary Commerce Younas Dagha took up cudgels on Sunday to bare reasons for the consistent decline in exports during the last four years and the Finance Minister Ishaq Dar has demanded tax relief for different sectors to halt the hemorrhaging decline in exports.
Finance Minister Ishaq Dar spent a busy day chairing different preparatory meetings for the upcoming budget for FY 2017-18 on Sunday.
An official source said that the secretary commerce presented the budget and tax related proposals for the trade and commerce sector to the finance minister, based on consultations he had held with representatives of various industries and exporters. The majority of the budget proposals related to tariff, sales tax refunds and customs rebates.
Dagha stressed all the potential export sectors should be included in the zero-rating regime. The customs rebate on imported inputs may be adjusted at the time of the receipt of remittance rather than a refund, later on, as it affects the cash flows and increases the cost of doing business.
The commerce secretary, the source said, had come in extra prepared and the finance team was surprised with his spirited arguments on various tax proposals. Dagha said that the ministry of commerce categorically backed the views of the export sector on the policy choices which were affecting their competitiveness. He said, he had personally visited exporters in Karachi and Lahore to firm up their budget proposals for exports growth.
Dagha said, currently, the zero-rating facility is available to only five export sectors which include textiles ($9.36 billion), leather ($396 million), surgical goods ($262 million), sports goods ($234 million) and carpets ($74 million).
However, other sectors which contribute to exports even more than the eligible sectors like rice ($1.37 billion), fish and fish preparations ($240 million), fruits ($356 million), meat and meat preparation ($212 million), chemicals ($294 million), pharmaceuticals ($ 588 million), cement ($ 248 million), plastic material ($ 141 million) have been ignored.
The finance minister said that the proposals would be accorded due consideration in the budget preparations. He said the government is fully cognizant of the need to boost the country’s exports in order to achieve higher, sustainable and inclusive export-led GDP growth.
Secretary commerce said the incentives provided under the Prime Minister’s package are having a positive impact, and the export figures have shown a noticeable improvement in recent months as a result.
The minister also reviewed the tax and relief measures to be announced in the forthcoming budget. He instructed the officials of the ministry of finance and FBR to complete the budget work as early as possible, according to the prescribed timelines.
Finance secretary, secretary EAD, secretary commerce, chairman FBR, and senior officials of the ministry of finance, FBR and SBP also attended the meeting.
