In a significant move to bolster trade and economic relationships, the Federal Board of Revenue (FBR) has granted Rs45 billion in customs duty exemptions and concessions on imports under various Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) for the fiscal year 2019/2020.
According to FBR data, the total exemptions and concessions amounted to Rs45.02 billion. These financial incentives are aimed at promoting bilateral trade, encouraging economic cooperation, and reducing the cost of imports for various industries, the FBR said.
Breakdown of Exemptions and Concessions
The detailed breakdown of these exemptions and concessions reveals that the FBR has strategically targeted specific countries and agreements to maximize economic benefits. Under the South Asian Free Trade Area (SAFTA) Agreement, the FBR exempted Rs1.6 billion worth of imports from SAARC countries. This exemption was granted based on SRO 12749i)/2006, highlighting the importance of regional cooperation and economic integration within South Asia.
A substantial portion of the exemptions, amounting to Rs26.85 billion, was provided under the Pak-China FTA. This general exemption was granted on the basis of Table-I of SRO 659(I)/2007, reflecting the strong economic ties between Pakistan and China. Additionally, another Rs6.911 billion exemption was granted under Table-II of SRO 659(I)/2007, further facilitating trade between the two nations.
Malaysia also benefited from these exemptions under the PTA, with Rs2.52 billion granted under SRO 1261(I)/2007 Table-I and Rs922 million under SRO 1261(I)/2007 Table-II. These concessions aim to enhance trade relations and economic cooperation with Malaysia.
Similarly, the Pak-Indonesia PTA saw exemptions totaling Rs3.64 billion under SRO 741(I)/2013. This agreement is part of a broader strategy to strengthen economic ties with ASEAN countries, promoting regional trade and investment.
Lastly, the Pak-Sri Lanka FTA resulted in Rs1.77 billion in exemptions under SRO 280(I)/2014. This move is designed to foster closer economic ties with Sri Lanka, facilitating smoother and more cost-effective trade flows between the two countries.
Economic Implications
The FBR’s decision to grant these exemptions and concessions is expected to have far-reaching economic implications. By reducing the cost of imports, these measures aim to enhance the competitiveness of local industries, promote economic growth, and foster closer economic ties with partner countries. The strategic focus on key trading partners and regional agreements underscores Pakistan’s commitment to enhancing trade and economic cooperation.
The Rs45 billion granted by the FBR as customs duty exemptions and concessions is a clear indication of the government’s dedication to supporting trade and economic development, while also strengthening international economic partnerships.
