FPCCI demands withdrawal of one percent surcharge on imports

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has demanded of the Central Board of Revenue (CBR) to abolish one percent special surcharge imposed at import stage, which would increase the cost of production.
In a post-budget meeting held here on Monday, the members of FPCCI informed CBR Chairman M. Abdullah Yusuf about the implications of the surcharge on the domestic industry.
The businessmen opined that imposition of one percent special import surcharge across the board, with the exception of a few food items, would increase the cost of production, making the industry uncompetitive both at national and international levels. They requested the CBR chief to immediately withdraw the levy.
The representatives of fan, cutlery, welding electrodes, polypropylene women sacks, vegetable ghee, formic acid, ceramic tiles and pharmaceutical industries etc explained the problems being faced by them.
The problems presented by the representatives of various industries were supported by Tanvir Ahmad Sheikh, President, and Tariq Sayeed, a former president of FPCCI. To promote engineering industry, Iftikhar Ali Malik said that the government should ask the automobile assemblers and OEMs to delete the technological part, specially the engine, for domestic manufacturing so that technological transfer can take place and vendor industry develops.
He asked the CBR Chairman that in order to avoid misdeclaration and classification disputes items which are similar and which fall under different HS sub-heads be brought under a single HS sub-head, such as 8421. The present different eight digits with tariff differences motivate misdeclaration in the direction of lower tariff assigned to the sub-headings under 8421. 8421.0000 should all be assigned single tariff as the domestic industry of filtration and pollution control is quite capable of meeting the domestic demand.
He said that liberal import of capital goods and machinery as allowed under SRO 575(I)/2006 amended vide SRO 490/(1)/2007 should not include spares and accessories of chapter 84 and 85 as other engineering industries will not develop.
CBR Chairman urged the FPCCI to prepare 5-year plan to make Pakistan products competitive in international market. He expressed hope that the private sector, under the umbrella of FPCCI, would play a vital role in achieving the revenue target of Rs 1.025 billion set for 2007-08. Tanvir assured the Chairman of FPCCI's help to the government in achieving, rather surpassing, the revenue target.
He said that the textile sector was dismayed that the textile package including a debt swap scheme as promised by the Textile Minister was not announced in the budget. Only 3 percent reduction in mark-up has been promised but there are no details.
The CBR Chairman explained in detail the rationale behind the increase of sales tax from 15 to 20 percent on specified raw materials of plastics, paper and iron and steel industries as well as some specified chemicals. This would discourage informal manufacturing and to induce them to be compliant to obtain input tax adjustment as the end products remained chargeable to 15 percent sales tax. He assured them to review 20 percent sales tax in case it was proved that certain sectors had reasonable value-addition.
The CBR Chairman also sought help of FPCCI in rooting out the menace of under-invoicing and misdeclaration and, in return, CBR would ensure trade facilitation. He urged the FPCCI leadership to conduct market survey of major selected import items to ascertain their correct values for assessment of duties and taxes.
Tax authorities agreed with the proposal of Tariq Sayeed that for proper and independent valuation of the selected items market surveys should be conducted through college students. The meeting was also attended by FPCCI vice presidents Azhar Saeed Butt, Zubair Tufail, Qamar Zaman Gill, Fazal Elahi and Ahsan Farid.