FBR reluctant to remove duty on timber imports: APTTA

ISLAMABAD: While an illegal cutting of timber has been causing more deforestation in the country, the Federal Board of Revenue (FBR) seems reluctant to remove an additional customs duty (ACD) imposed on the import of raw wood and timber to generate around Rs200 million additional revenues.

In a letter written to Prime Minister Imran Khan recently, the All Pakistan Timber Traders Association (APTTA) had requested the premier to intervene as two per cent ACD on the import of raw wood/timer was badly affecting the government’s efforts to save forests and safeguard environment as the demand was currently being met with illegal timber cutting and trade.

As imports had drastically reduced following the imposition of ACD, the timber mafia, which was involved in illegal cutting of trees and timber, was ultimately increasing its illegal activities, the association said in the written correspondence.

Referring to the recommendations of the National Assembly’s Standing Committee on Finance, which had discussed the issue in detail in the recent meetings, the association claimed that the FBR was reluctant to remove duty.

The letter further stated that Rs200 million was a peanut against an amount of Rs125 billion the government was spending on saving jungle stocks, so the basic principle of taxation should not be to collect revenue by force.

APTTA Chairman Sharjil Goplani said the Ministry of Climate Change (MoCC) had recommended several times to abolish the customs duty and all other taxes to reduce pressure on national forests.

The importers claim that because of higher customs duty, sales tax and withholding tax on wood and timber (HS Code 44.03 and 44.07) along with heavy devaluation, the commercial activities have gone down and it’s time for the PTI government to take necessary measures to protect the industry.

Goplani said the bureau was receiving 32-34 per cent customs duty, sales tax and withholding tax and up to 42pc on the import of wood and timber as raw material, urging the government to remove it.

“We can more than hypothetically assume that the shortfall in respect of revenues will be offset by the increased business activities, which will also create many jobs in Pakistan,” Goplani said, and added that wood and timber were raw materials and basic need of many other industries.

According to the APTTA, China is importing raw wood and timber from all over the world including US, Canada, and Africa, whereas, it is exporting value-added products to US, Canada, European countries, Middle East, and North African countries.

The APTTA chairman said if the government allowed duty-free import of wood, it wouldn’t only boost the construction industry but also would lead to the promotion of many downstream industries by creating a healthy business environment in Pakistan.

According to 2015 report of the Food and Agriculture Organization (FAO), the forest reserves in Pakistan are 1.9 per cent that is almost zero compared to other countries.