Government urged to withdraw additional customs duty

The government has been urged to withdraw additional customs duty because it is causing an increase in cost of production for the industry. Senator Talha Mehmood and others forwarded their recommendations to the Senate Standing Committee on Finance, presided over by Farooq H Naek, for consideration and onward submission to the government for incorporating in the Finance Bill 2018.
Senator Mehmood stated that finance bill proposes additional customs duty of 1 percent which would make the total additional customs duty to 2 percent for fiscal year 2018-19. This is in addition to normal rate of customs duty on any product at the end of industrial undertaking. The senator recommended that the levy of additional customs duties for the last two years has been causing increase in manufacturing cost as raw materials are subject to additional customs duty. This leads to incremental burden, which cannot be passed on to end consumers, therefore, it is recommended to withdraw additional customs duty so that relief is passed on to end consumers.
He further stated that the Finance Bill 2018 proposed immediate recovery of unpaid advance tax. This, he added, is very punitive at the end of revenue and basis has been fixed at 110 percent. The amendment needs to be reviewed considering limitation on unabsorbed depreciation, which shall enhance advance tax liability.
He recommended that in presence of powers for audit/amendment of assessment by commissioner, this additional power will lead to undue litigation and assessment of advance tax. The proposed amendment should be withdrawn. Senator Dilawar Khan''s recommendations included that the government should get the Drug Regulatory Authority of Pakistan (DRAP) certified from WHO as this would contribute towards developing a level playing field for local manufacturers.
He added that the WHO certification for a regulatory authority in health sector is globally considered a benchmark of quality but DRAP lacks such standard due to which most of life-saving drugs fail to get appropriate market share globally.
Therefore, it is recommended that government should get the DRAP certified from the WHO. This would contribute towards developing a level playing field for local manufacturers. There is a disparity in the testing fee charged against testing of local and imported vaccines. The National Control Lab test charges are Rs 10,000 whereas the local manufacturer is charging Rs 30,000. There is a need to encourage local industry and such discriminatory policies need to be reviewed.
He said the government should either impose a complete ban on imported vaccines or enhance tax ratio on imported products with a view to give local industry a chance. The local industry has huge potential to produce quality vaccines and other life-saving drugs if the policies are framed for the development of local industry and less reliance is made on imports by imposing strict regimes. Neighbouring countries have also introduced such policies and planning mechanisms which prioritize the local industrial growth.
Senator Dilawar also recommended extending maximum support to agriculture sector of the country by introducing new technology and farmer friendly policies. He said crops like tobacco are contributing immensely to national exchequer; however, there are some unjustified taxes which are needed to be reviewed.
He said although after the passage of 18th Constitutional Amendment, the subject of agriculture has been shifted to provinces yet a mechanism can be evolved to address the problems of agriculture sector, and the federal government in consultation of provincial governments can draft a policy for this purpose.