FBR, ministries of communications and energy blamed for hindering exports

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LAHORE: The Ministry of Commerce (MoC) has blamed the Federal Board of Revenue (FBR), the Ministry of Communications (MoC) and the Ministry of Energy’s Power Division for hampering the country’s exports, sources told Profit on Sunday.

The commerce ministry took up its reservations at a recent meeting headed by Prime Minister Imran Khan that reviewed the ministry’s performance regarding the country’s exports, sources added.

The MoC officials during the meeting requested the premier to issue instructions to all the ministries and departments that no decision about the country’s exports should be taken without consulting the commerce ministry.

Sources said PM Imran Khan gave a nod to the request of the ministry.

The MoC submitted a note during the meeting which stated that a number of factors that had affected the Pakistani exports were not in MoC’s control.

Officials further informed the premier about new fines and regulations imposed by the communications ministry on goods transporters, and pending sales tax returns from FBR to the textile exporters which were approximately Rs23 billion as of January 21.

The prime minister was further informed that the Power Division’s notification of January 13, which had instructed the distribution companies (DISCOs) to charge the export-oriented sector with financial cost (FC) surcharge, fixed charge (F/C), Neelum Jhelum (NJ) surcharge, fuel charge adjustments (FCA) and Quarterly Tariff Adjustment (QTA) from January 1 to December 31, 2019 with retrospective effect, had too badly hampered the country’s exports.

“All these ministries and departments haven’t consulted the commerce ministry before taking these decisions,” the MoC note read.

The nine-day strike of goods transporters in January this year, following new regulations and fines imposed by the Ministry of Communications, also stalled the movement of export containers, the premier was further informed.

“The strike had an adverse impact on the transportation of export containers to Karachi from across the country, which also reflected in the export figures for the said period.”

The exports of Pakistan in January stood at $1,973 million which is $61 million less than the exports during the same month in 2019.

The MoC, sources said, also informed PM Imran Khan that FBR in the budget for 2019-20 had withdrawn zero-rating regime from five major export sectors including textile, leather, carpet, surgical and sports good with the assurance that that they would come up with a system to clear refunds to the exporters within 3 days but that system was still not in place.

Officials said they had opposed the move since day one, as they believed that this move would lead to liquidity crunch for the exporters and would subsequently hamper the exports.

The MoC also enlightened the prime minister that as of January 21, FBR had not cleared approximately Rs23 billion pending ST claims to the export-oriented textile sector.

Unfortunately, the MoC was not consulted in the instances mentioned above, which was a violation of the Rules of Business, officials told the premier.

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