ISLAMABAD: Exporters and melters of copper and aluminium have requested the government to refrain from imposing duty on exports of the two metals.
Officials said that a total of $700 million from copper ingots, and $30 million from the export of aluminium ingots were earned for the national exchequer in this year.
“Our combined exports would have touched $1 billion, but we were not able to achieve that target due to three months of lockdown due to the ongoing pandemic,” they added.
On the other hand, fan manufacturers have requested the government to go ahead with imposing duty on copper and aluminium exports as prices of the product have increased in the international market due to which their profit has decreased.
Officials said that the fan industry’s exports, after value addition, equal $24 million, while one exporter alone sends copper worth $50 million to China.
However, exporters of copper and aluminium had recently held a meeting with Advisor to the Prime Minister (PM) on Commerce and Investment, Abdul Razak Dawood, warning of a possible fallout if the government imposes duty on the export of ingots.
The commerce advisor was informed that Pakistan exports copper and aluminium by adding value to metal scrap.
“We have been exporting copper ingots since 2008, and throughout the last 12 years, local manufacturers have never faced a shortage of copper or aluminum scrap in the country. Even today, scrap is available in abundance and local manufacturers can easily import it in case they face a shortage as the government has already given many tax-related exemptions on the import of raw materials,” exporters said.
The advisor was further informed that export target for the year 2021 is $2,000 million for the two metals but can be increased tenfold with the government’s support.
Presently, China is importing $40 billion copper and aluminium ingots while Pakistan’s contribution is below a billion dollars.
It is pertinent to mention here that China has zero-rated this sector under the free trade agreement signed last year due to which copper and aluminium ingots exports reached $730 million in China.
Officials said that Chinese investors are also establishing the copper and aluminium ingots industry in Pakistan and any duty can hurt this investment.
All the exporters of Copper and Almunium are involved in heavy under invoicing and money laundering. As they are importing on invoice value of USD2/kg and paying less taxes on imports and exporting at USD7/kg and showing USD5/kg on exports. Means taking tax refunds on USD5/kg whereas paying on USD2/kg. The real selling sellig price is USD7/kg. Means all they are laindering around USD2/kg abroad. Check their export and import customs value and buyer details in Customs Chapter 76 for import and export. Huge manipulation in taxes and refunds, under invoiving in imports, under invoicing on exports, money laundering, tax refunds. Thorough investigation is needed by Commerce Ministry for Copper and Aluminium import and exports. It should be banned as they are also exporting our local available scrap which can be used for local production of electric appliances such as fans, water pumps and motors, washing machines, refrigerators and many other products. Exporters are just exporting Copper to claim fake refunds on imported copper scrap and under invoicing against actual value of copper exports for their money laundering purpose. Copper Ingot exports should be permanently banned and restricted. Its big fraud.. another pandora box of malpractices.
Under invoicing is the issue mainly concerned with the finish goods, Cu or Au is imported in form of scraps like Wire scrap, EM Scrap and etc.. Pakistan Customs has a fix Value declaration under which one can’t dodge the taxes under going that declared value. Exporting Metals boast up recycling industry creating many jobs, export provides a big opportunity to gain foreign exchange helps PKR to get strong in international market whereas fan industry alone can never achieve max growth potential for the Cu industry in Pakistan.