Secretary Commerce tells LCCI: ‘All institutions will discuss problems of business community’

LAHORE: Federal Secretary Commerce Muhammad Sauleh Ahmed Farooqui on Friday said that the business community is a part of the Ministry of Commerce. LCCI visit helps in getting direct information from the stakeholders and statistics. He added that the proposals of Lahore Chamber of Commerce and Industry strengthen the Ministry of Commerce.

He expressed these views while addressing a meeting at Lahore Chamber of Commerce and Industry. LCCI President Kashif Anwar presented the address of welcome and shed light on the issues being faced by the business community while Senior Vice President Zafar Mehmood Chaudhary and Adnan Khalid Butt, Joint Secretary Ministry of Commerce Muhammad Ashfaq and DG TDAP also spoke on the occasion. Former Senior Vice Presidents Amjad Ali Jawa, Kashif Younas Meher, Rehman Aziz Chan, EC Members Mujahid Maqsood Butt and Shamim Akhter were present in the meeting.

The Federal Secretary Commerce said that Prime Minister has directed to ensure facilities for the industry. In the next few days, all the institutions will sit together and discuss the problems of the business community. “We understand that currently the industry is facing many problems including high cost of production, input cost, energy and liquidity,” he said adding that the regulatory burden on all of them is adding to the difficulties.

He said that the Tariff Policy Board has been handed over from FBR to Ministry of Commerce some time ago. There is an effort to use tariff as tool for growth this is the next plan of action. At present, efforts are being made to rationalize the tariff.

He said that the National Tariff Policy that was approved in 2019 has more than 7500 tariff lines, out of which the duty tariff structure of 6500 has been changed, which is more than 85%. In this way, benefit of more than Rs90 billion has been transferred.

Till now 2198 tariff lines have been zero rated which are not made in the country. Pharmaceutical APIs are zero-rated. Tariffs for manmade fibre have been reduced. Tariffs have also been improved in iron steel and other sectors. He said that violation of the cascading principal have been made corrected.

He said that without promoting industry and agriculture, the needs of the population and youth cannot be met. We have no industrial policy yet. In this regard, the work is going on in the Industry Division. He said that work on regional links; new agreements, new markets and new products are also underway.

He said that our exports are limited to a few markets and products like USA, Europe, UK and textile products. He said that there is a scope to increase the exports of rice, fruits, milk, beef, dry chillies and dairy products, 70 percent of European market has been captured by Pakistani Basmati. Other products should also be considered.

He added that to promote trade, transit trade agreement and preferential trade agreement has been signed with Uzbekistan, talks are also ongoing with Tajikistan while agreements with Central Asian countries will be signed in 2024. There were problems with banking channels with Iran, Afghanistan and Russia. Barter trade agreements have been signed with Russia and Iran, while work is underway for an agreement with Afghanistan. Apart from this, negotiations on FTA in GCC countries have been completed.

He said that work is in progress to open the Khunjarab route for all the year. Meeting of Pak China Joint Committee will be held soon. We have a transit trade agreement with Afghanistan, but things are also going through China to Central Asia. He said that our ports are working below capacity. The infrastructure must be used. The budget of TDAP has been increased.

LCCI President Kashif Anwar said that the problems of local industry would have been solved if we want to increase exports. Local industries are facing many issues like rupee devaluation, inflation, high mark up rates, rising electricity, gas and fuel prices, MDI charges, reduction in axle load limit and increase in cargo delivery charges.

He said that SRO 457 (Tajir Dost Scheme), SRO 350 and SRO 1842 have added to the problems of business community. It is a burden on the taxpayers who are already in the tax net but have to face audits, fines and surcharges etc.

President of Lahore Chamber said that in Pakistan, import tariff is used for revenue generation. Export capabilities of our industry are greatly affected due to various duties. He said that changes must be introduced in the tariff structure promote the local industry and to get rid of smuggling. He suggested that customs duty, regulatory duty and additional customs duty on raw materials which are not locally produced must be abolished.

Kashif Anwar said that the duty on industrial machinery should also be reduced to enable industries for technological up-gradation. A large number of SMEs buy raw materials from the commercial importers on whom the rate of customs duty is very high. There must be no difference in customs duty rates for commercial importers and manufacturers as commercial importers are also indirectly supporting the industry.

The LCCI President added that due to many duty slabs, our tariff structure is very complex which needs to be simplified. The principle of cascading should be properly incorporated in the National Tariff Policy by dividing each industry into different segments and fixing a separate standardized tariff slab for each. He said that 0 percent for basic materials, raw materials, 5 to 10 percent for intermediate goods, 15 percent for semi-finished goods and 20 to 25 percent for finished and consumer goods should be fixed.

Kashif Anwar said that it is important to focus on industrialization and imports substitution. He said that reducing imports must be the first priority and increasing exports must be the second priority. This would be possible only if localization and value addition is promoted in the country. He said that the Ministry of Commerce should formulate a policy for import substitution so that manufacturing can be increased.

He also emphasized the need to focus on other markets including Africa, Central Asia and ASEAN. He said that 68% of the exports are coming from a few sectors like textile, rice and leather while we can increase the country’s exports by promoting potential sectors like halal food, pharmaceutical, Information Technology and engineering industry etc.

LCCI President said that there is a need to take full advantage of preferential trade and free trade agreements with other countries. He said that despite the FTA with China, the trade deficit is $14 billion while with Malaysia it is $700 million, so the agreements should be reviewed afresh.

He said that the exporters must be informed about the free trade agreement with GCC and the barter trade mechanism with Iran, Afghanistan and Russia through SRO 642. He also emphasized the need to increase regional trade.

He said that TDAP should book maximum number of stalls in all international trade fairs so that all exporters, women and SMEs can participate.

He said that under SRO 760 of the Ministry of Commerce, jewellers can bring 50% equivalent gold and 50% foreign exchange of their exports. Jewellers demand that they should be allowed to bring 100% gold. The printing and packaging sectors demands that duty-free import of raw materials produced in Pakistan should not be allowed under the Export Facilitation Scheme.

Kashif Anwar said that duties and taxes on food supplements are up to 75% even though they meet nutritional and public health needs. These should be included in Chapter 99 and made duty free. He said that the raw material of the steel sector, wire rod, is not made in Pakistan, but regulatory duty and additional customs duty are imposed, which must be abolished.

He said that it is a long-standing demand of the carpet industry that all types of carpets should be included in existing and new free trade and preferential trade agreements and also be supported to participate in international fairs. Penalties ranging from 3 to 9 percent imposed on the carpet industry for delay in export proceedings must be abolished immediately. He also proposed to establish help desk of Ministry of Commerce in Lahore Chamber.

Copyright Business Recorder, 2024