KARACHI: Federal Board of Revenue (FBR) has been suggested to eliminate additional customs duty and regulatory duty on essential raw materials.
The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals recommended tariff rationalization in the forthcoming for budget 2019/2020.
It recommended elimination of additional custom duty and regulatory duty on essential raw materials, which are either not locally available or in limited supply, used for local manufacturing.
The OICCI – the representative body of foreign investors – also suggested bringing illicit trade into tax ambit.
It said that on the basis of survey conducted by OICCI amongst its members, losses to the government exchequer due to Illicit trade (business in products which are either smuggled, counterfeit, under-invoiced imports, sold by unregistered manufacturer/seller, etc.) is estimated at Rs200 billion (tobacco alone estimated at Rs63 billion only).
In order to control the Afghan Transit Trade, it recommended:
Harmonize duty and tax rates to remove the incentive for evasion.
Fix quantitative limits for imports based on genuine Afghan needs and size of population.
Establish a basis of collecting duty/taxes at the point of entry into Pakistan for the account of the Afghanistan Government
Fix import value in consultation with the brand owner in Pakistan.
Customs procedures and Cross-border rules should be published for transparency.
Containers coming back from Afghanistan should be checked by customs.
There should be a negative list of items which are not utilized in Afghanistan; yet are imported and make their way into Pakistan.
Streamlining of border crossing procedures on financial guarantee by banks and anti‐corruption measures.
Export to Afghanistan be facilitated with simplified procedure by FBR and border control authorities.
For stringent controls illicit trade, it recommended:
Introduce tighter penalties for illicit trade across categories, including criminal liability across the value chain, including retailers, distributors and manufacturers
Introduce a special division/ task force to raid retailers and manufacturers to confiscate and destroy illicit stocks
Launch a media campaign to increase awareness in consumers of the harms of illicit products and discourage them from purchasing such products
The OICCI suggested structural reforms in the customs:
Do a thorough review of the custom regime, in consultation with brand owners, to address issues of counterfeiting, smuggling, and rationalization of duty structure and fixing of import Tariff prices.
Custom valuation should be done on modern lines through online search and matching international and regional pricing and taking local legal importers of items on board.
IPR (Intellectual Property Rights) laws implementation in Pakistan need to be strengthened. Special IPR tribunals may be formed for speedy trials leading towards IPR compliance at par with international standards of IPR enforceability.
Unauthorized imports of counterfeit products should be effectively checked through registration of brands with the custom authorities in coordination with the original brand owner/ registered in Pakistan.
Valuation ruling should be issued in consultation with the owner of the brand or its authorized representative.
The data of import should be public (restrictively) to ensure transparency and this will also help in taking over of goods under section 25A of the Custom Act, 1969.
FBR notifies elimination, reduction of regulatory duties on several raw materials; issues SRO