KARACHI: Federal Board of Revenue (FBR) has been urged to allow tax holiday to import of industrial raw material in order to help the country to fetch much needed foreign exchange through enhanced exports.
Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, said that Pakistan’s exports are limited to very few sectors.
Payment of cash subsidies and multiple currency depreciation failed to improve exports. As per Fifth Schedule to the Customs Act, 1969 Imports of Textile Machinery and equipment for textile sector is exempted from custom duty and rate of withholding tax is one percent by the textile manufacturing units registered with Ministry of Textiles whereas for other industries Customs Duty is levied at 5.5 percent which is discriminatory and an anomaly.
The exports of non-traditional items have not been promoted due to such discriminatory treatment.
Pakistan could not achieve true export potential which exists in many sectors.
The KCCI proposed that there is a need to go beyond textile and agriculture products.
Export diversification is important. For this all industrial machineries and equipment not locally manufactured may be exempted from Customs Duty, Additional Customs Duty/Sales Taxand Additional Sales Tax.
Withholding Income Tax may be charged at 1 percent, which may be Adjustable/Refundable.
Machineries with latest technology will be imported production will increase for local consumption and for global exports.
Employment and government revenue will increase.