LAHORE: The Federal Board of Revenue (FBR) has devised an integrated strategy to ensure a significant increase in exports of Pakistan.
While mentioning factors that have facilitated growth in exports, the FBR sources have stated that import duties on 1,623 tariff lines pertaining to basic raw material and intermediate goods were reduced to zero through the Finance Act, 2020. In pursuance of this strategy, additional customs duties and regulatory duties on 164 items related to the textile sector, not manufactured in the country, were also removed in collaboration with all the stakeholders. All these measures, they said, were undertaken with the objectives of neutralizing the adverse impact of the COVID 19 pandemic, especially for the exporters, and to make their products competitive vis-a-vis those of their competitors in the international market.
Under the initiative of "Make in Pakistan", the duty drawback rates for at least eight sectors were revised upwards by the FBR. More than 434,000 claims were disposed of and approximately 7,800 exporters have benefited from this initiative. Similarly, the FBR has paid 90 percent more refunds as compared to the previous fiscal years. This led to a significant rise in volumes of exports in the form of an increase in TEUs (i.e. tonnage equivalent units) / containers from 35,477 in July 2020 to 62,591 in December 2020, showing a growth of 43%. In order to tangibly contribute to exports, all the export facilitation schemes were simplified/rationalized for their optimal use by the exporters.
First of all, said the sources, the FBR allowed extension in utilization period of different export facilitation schemes for a period of one year from 1st March, 2020 to 28th February, 2021. Secondly, the retention period for plant and machinery, under the export oriented units scheme, was reduced from 10 years to five years.
Thirdly, for the prompt redressal of grievances, one administrative tier is reduced (under duty and taxes remission for export scheme and manufacturing bond scheme) and regulatory authority is created to facilitate the exporters. Moreover, they said, the investors in export processing zones have been facilitated in payment of duties/taxes on the disposal of machinery in the tariff area. These facilitation measures have led to an increase in the number of exports' goods declarations (GDs).
To realize the objective of facilitation/promotion of exports, an automated system of filing the claim to the final sanctioning of duty drawback claims for the payment of duty drawback claims to the exporter was rolled out on 1st October 2020.
As a matter of fact, the export goods declaration filed in the Customs WeBOC system is being considered as the Duty Drawback Claim. State Bank of Pakistan credits the system sanctioned payments in the accounts of exporters online directly. Similarly, for speedy payment of Sales Tax refunds to exporters, the FASTER PLUS system has been implemented. The FBR has also removed regulatory duty on import of cotton yarn, till 30th June 2021, which is a basic raw material for the value-added textile industry of Pakistan. Being committed to the national goal of an increase in exports, the Board is making all-out efforts to assist exporters by continuously making improvements in its laws and procedures.
Copyright Business Recorder, 2021