ISLAMABAD
The Senate Standing Committee on Finance on Monday recommended the government to impose regulatory duty on the import of products being manufactured locally from Free Trade Agreement countries and stressed tax relief on products used by the local industry.
The meeting of the committee was held under the chairmanship of Saleem Mandviwala. The committee completed review of the Finance Bill 2017-18 and finalized its budget recommendations.
The committee had called representatives of the dairy, ghee, stationary, beverage can and cable manufacturing industry. The committee discussed industrial sector issues regarding taxes and customs duties.
The representatives of beverage can industry expressed apprehensions over the duty free import of aluminum beverage cans from Sri Lanka. They said that the company has made a huge investment of $70 million in the industry for supplies in beverage cans in Pakistan and Afghanistan. If timely measures against duty free can imports from Sri Lanka was not taken their investment was under risk. The committee recommended FBR to take necessary steps to increase the duty on import of aluminum cans.
Representatives of the cable manufacturing industry said that the K Electric was allowed duty free import of cable; it had caused a lot of difficulties for the local industry which already was under pressure from import of low quality cable China. The committee directed FBR to impose regulatory duty on the import of manufactured cable from China.
The committee asked the FBR to resolve the issue of zero rating for the dairy sector, which the taxmen said was very difficult to be granted. Dairy industry claimed that the excessive taxation was hampering growth of the industry and many milk collection centers were likely to be closed. The demanded import of milk powder should be made duty free but this demand was not accepted.
The stationary sector too demanded zero rating for the import of raw material for manufacturing pencils and erasers. They said that the government had taxed pencils and erasers. It was pointed out that the stationary industry was in dire straits due to taxes and local manufacturing may end if timely steps were not taken.
The committee recommended bringing the ghee industry in FATA and PATA under the income tax law as well as recovery of sales tax on the imported raw material. Representatives of ghee industry said that out of 26 ghee mills 14 have closed down in Khyber Pakhtunkhwa due to the tax relief given to ghee factories in FATA and PATA. They said the ghee factories in settled areas of the province were unable to compete with the factories in FATA and PATA.
They also recommended providing same facilities to local investors that were being provided to the Chinese investors under China Pakistan Economic Corridor (CPEC). The committee supported the demand and recommended it for approval before the National Assembly.
The meeting was attended by Senators Ilyas Bilour, Mohsin Khan Leghari, Osman Saifullah Khan, Mohsin Aziz, Talha Mehmood and Kamil Ali Agha.
