In a bid to curb the escalating import bill and foreign exchange outflow, the Federal Board of Revenue (FBR) unveiled a significant surge in regulatory duty on the import of new motor vehicles.
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Yarn merchants appeal for not imposing regulatory duty
KARACHI: Pakistan Yarn Merchants Association (PYMA) has expressed serious concerns over reports suggesting imposition of regulatory duty on polyester yarns.
Saqib Naseem, PYMA Central Chairman in a statement on Wednesday expressed deep concern over rumors circulating about lobbying for imposition of regulatory duty on imported polyester yarns by local manufacturers of polyester filament yarns.
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He urged Adviser to Prime Minister on Finance, Shaukat Tarin not to succumb to the pressure of local manufacturers, and to reject any proposal for imposition of regulatory duty on imports of polyester filament yarns, especially HS Code 5402.3300 and HS Code 5402.4700.
Appealing in a letter to Finance Advisor Shaukat Tarin, Chairman PYMA said that the local manufacturers of polyester filament yarns were lobbying the concerned agencies, especially the Ministry of Commerce, to impose regulatory duty on imported polyester yarns.
This would be extremely detrimental to the local consumers of polyester filament yarn, and would be against the government’s policy of ensuring the availability of raw materials to the industry and consumers at competitive prices.
READ MORE: Yarn merchants demand cut in interest rate
Saqib Naseem said “In the letter that despite the fact that local manufacturers of polyester filament yarns are already enjoying discounted tariffs, efforts to implement regulatory duties will significantly increase the production cost of local industries”, fearing that therefore, no such proposal should be considered which is detrimental to the domestic industries.
PYMA chairman was of the opinion the current custom duty of 11% is rather excessive. For your information the custom duty on polyester staple fiber is 7% and the local manufacturers of PSF seem to be doing with this level of protection. There is no significant production cost difference between polyester staple fiber and polyester filament yarn.
READ MORE: PYMA demands cotton import through land routes
He added that the weaving and knitting industry (user industry) is already facing a very challenging situation due to very high cotton and polyester yarn prices, and imposition of regulatory duty would be extremely counterproductive especially when the local user industry has to import 65 per cent of its requirements of polyester filament yarn from foreign suppliers.
Saqib Naseem urged the government not to listen to the unjust pressure of local manufacturers of polyester filament yarns to impose regulatory duties, and only take measures to reduce the cost of production of domestic industries and stabilize the economy.
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Restrictions to up motor vehicle cost, reduce demand
KARACHI: The planned restrictions on automotive industry likely to increase the cost of motor vehicles and simultaneously to reduce the demand.
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Updated rates of regulatory duty on import of motor vehicles into Pakistan
The Federal Board of Revenue (FBR) has issued latest rates of regulatory duty applicable on import of motor vehicles into Pakistan. The rates are applicable from July 01, 2021.
In order to apply the rates of the regulatory duty the FBR issued SRO 840(I)/2021 dated June 30, 2021.
Following are the rates of regulatory duty on motor vehicles, along with HS Code, description and rate of regulatory duty:
8703.2193 New 4×4 vehicles in completely built unit (CBU): 15 per cent
8703.2195 New Mini vans (CBU): 15 per cent
8703.2199 Other (New): 15 per cent
8703.2220 New Vehicles of a cylinder capacity exceeding 1000cc but not exceeding 1300cc: 15 per cent
8703.2240 New Mini vans (CBU): 15 per cent
8703.2260 New Sport utility vehicles: 15 per cent
8703.2290 Other (New): 15 per cent
8703.2313 New Sport utility vehicles: 15 per cent
8703.2319 Other (New): 15 per cent
8703.2323 New Sport utility vehicles (SUVs 4×4): 90 per cent
8703.2323 Old and used sport utility vehicles 1801cc to 3000cc: 70 per cent
8703.2329 Other (New): 90 per cent
8703.2329 Old and used cars and Jeeps 1801 cc to 3000cc: 70 per cent
8703.2490 Other (New): 90 per cent
8703.2490 Old and used cars and jeeps above 3000 cc: 70 per cent
8703.3129 Other (New): 15 per cent
8703.3139 Other (New): 15 per cent
8703.3219 Other (New): 15 per cent
8703.3223 New Sport utility vehicles (SUVs 4×4): 90 per cent
8703.3223 Old and used sport utility vehicles above 2000cc: 70 per cent
8703.3225 New All-terrain vehicles (4×4): 90 per cent
8703.3225 Old and used All terrain vehicles (CBU): 70 per cent
8703.3229 Other (New): 90 per cent
8703.3229 Old and used cars and jeeps above 2000 cc: 70 per cent.
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Regulatory duty on exports reduced
KARACHI: The Federal Board of Revenue (FBR) has slashed regulatory duty up to half on export of goods.
The FBR issued SRO 843(I)/2021 dated June 30, 2021 to amend the SRO 645(I)/2018 dated May 24, 2018, which is related to regulatory duty on export of goods.
According to the latest SRO the regulatory duty on export of hides and skins has been reduced to 10 per cent from 20 per cent.
Similarly, the regulatory duty on export of molasses has been reduced to 10 per cent from 15 per cent.
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New rates of regulatory duty on imported smart phones
ISLAMABAD: Federal Board of Revenue (FBR) has notified new rates of regulatory duty to be imposed on imported mobile phones during.
The FBR issued SRO 840(I)/2021 dated June 30, 2021 to notify regulatory duty on 599 tariff lines.
Following are the rates of regulatory duty on mobile phone with effect from July 01, 2021:
HS Code Description Regulatory Duty 8517.1219 Other having C&F Value up to US$ 30 per set excluding Smart Phones Rs.300/set 8517.1219 Other (having C&F Value above US$ 30 per set but not exceeding US$ 100 per set, including Smart Phones having C&F value up to US$ 30 per set) Rs.3,000/set 8517.1219 Other (having C&F Value above US$ 100 per set but not exceeding US$ 200 per set) Rs.7,500/set 8517.1219 Other (having C&F Value above US$ 200 per set but not exceeding US$ 350 per set) Rs.11,000/set 8517.1219 Other (having C&F Value above US$ 350 per set but not exceeding US$ 500 per set) Rs.15,000/set 8517.1219 Other (having C&F Value above US$ 500 per set) Rs.22,000/set -
Budget 2021/2022: Duty, taxes abolished on cars up to 850cc
ISLAMABAD: The government has announced abolishing duty and taxes on locally manufactured and imported cars with engine capacity up to 850cc to enable low earning families to afford motor vehicles.
Finance Minister Shaukat Tarin while presenting federal #budget 2021/2022 on Friday announced duty and tax incentives for sale and import of motor cars with engine capacity up to 850cc.
The finance minister made following announcement:
Withdrawal of FED and Reduction in Sales Tax on Locally Manufactured cars up to 850 cc: Rising prices of locally manufactured small cars is a major concern for low earning families. Accordingly, it is proposed that small cars upto 850 cc capacity may be exempted from levy of FE besides reducing Sales Tax rate from 17% to 12.5% and withdrawing value added tax.
Exemption from Withholding Tax on Import: It is proposed that no tax may be collected on imports of books, journals, agriculture equipment and motor vehicles in CBU condition upto 850 cc.
To incentives this sector further additional custom duty and regulatory duty on CBU import of vehicles upto 850cc are being exempted.
Whereas relief to existing manufacturing industry and new models is also being provided by removing Additional Customs Duty (ACD) and rationalizing the tariff structure.
Due to these targeted interventions the middle class of this country will be able to afford a car of this specific category and will accrue the benefits of governments flagship projects of “Meri Gari Scheme” which will enable many countrymen who wish to graduate from motorcycle to own their car by providing small car at an affordable price.
Moreover further incentives in the form of reduction of customs duties are also being provided to electric vehicles for one year to promote the culture of electric vehicle in Pakistan.
Similarly, keeping in view the changing international motorcycles trend usage of local manufacturing of heavy motorcycles and specific categories of trucks and tractors are also being incentivised by rationalizing the tariff structure.
Tax Incentives for promoting electric vehicles: To address environmental issues, reduce reliance on gasoline and provide cheaper source of transportation to public, Government of Pakistan is encouraging the manufacture and use of electric vehicles.
For this purpose, various tax exemptions and concessions are being proposed, which include tax exemption on import of CKD kits for local manufacturing of electric vehicles, reduction in sales tax rate on locally manufactured electric vehicles from 17% to 1%, withdrawal ofvalue addition tax on import of electric vehicles and CKD kits and withdrawal of federal excise duty on 4-wheelers electric vehicles.
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FBR attributes export growth to incentives, facilitation
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that the significant growth in export was mainly due to integrated strategy for duty and tax incentives and other facilitation.
The FBR has devised an Integrated Strategy which has amply contributed to significant increase in exports of Pakistan from $1.6 billion (in August, 2020) to $2.4 billion (in December, 2020).
Growth in exports of Pakistan in December, 2020 is up by 18.3 per cent as compared to $1.993 billion in the corresponding month last year.
While mentioning factors that have facilitated growth in exports, FBR has stated that Import duties on 1,623 tariff lines, pertaining to basic raw material and intermediate goods were reduced to zero through the Finance Act, 2020.
In pursuance of this strategy, additional customs duties and regulatory duties on 164 items related to textile sector, not manufactured in the country, were also removed in collaboration with all the stakeholders.
All these measures were undertaken with the objectives of neutralizing adverse impact of COVID 19 Pandemic, especially for the exporters, and to make their products competitive vis-à-vis those of their competitors in the international market.
Under the initiative of “Make in Pakistan”, the Duty Drawback rates for at least eight (08) sectors were revised upwards by FBR. During the whole exercise, more than 434,000 claims were disposed of and approximately 7800 exporters have benefited from this Initiative.
Similarly, FBR has paid ninety (90) percent more refunds of Sales Tax during July-December, 2020 as compared to the corresponding period last year.
This led to significant rise in volumes of exports in the form of increase in TEUs (i.e. Tonnage Equivalent Units) / Containers from 35,477 in July, 2020 to 62,591 in December, 2020, showing a growth of 43 percent.
In order to tangibly contribute to exports, all the Export Facilitation Schemes were simplified / rationalized for their optimal use by the exporters.
First of all, extension in utilization period of different export facilitation schemes was allowed for a period of one year from 01st March, 2020 to 28th February, 2021.
Secondly, retention period for plant and machinery, under the Export Oriented Units Scheme, was reduced from 10 years to five years.
Thirdly, for the prompt redressal of grievances, one administrative tier is reduced (under Duty and Taxes Remission for Export Scheme and Manufacturing Bond Scheme) and Regulatory Authority is created to facilitate the exporters.
Moreover, the investors in Export Processing Zones have been facilitated in payment of duties/taxes on the disposal of machinery in the tariff area.
These facilitation measures have led to increase in number of exports Goods Declarations (GDs) from 71,190 in July, 2020 to 79,756 in December, 2020, posting an increase of 11 percent.
In the same vein, total number of Exports Goods Declarations (GDs) (from 1st July, 2020 to 31st December, 2020), remained at 408,472 vis-à-vis 333,943 during 1st January, 2020, showing an increase of 18 percent.
To realize the objective of facilitation / promotion of exports, an automated system of filing the claim to the final sanctioning of Duty Drawback Claims for the payment of Duty Drawback Claims to the exporter was rolled out on 1st October, 2020. As a matter of fact, export Goods Declaration filed in Customs WeBOC system is being considered as the Duty Drawback Claim. State Bank of Pakistan credits the system sanctioned payments in the accounts of exporters online directly.
In addition to the said automation initiative, Green Channel clearances of the exports GDs / Consignments were increased from 74 percent in July, 2020 to 77.3 percent in December, 2020.
Similarly, for speedy payment of Sales Tax refunds to exporters, FASTER PLUS System has been implemented.
FBR has also removed regulatory duty on import of cotton yarn, till 30th June, 2021, which is a basic raw material for the value-added textile industry of Pakistan.
Being committed to the national goal of increase in exports, Federal Board of Revenue is making all out efforts to assist exporters by continuously making improvements in its laws and procedures.
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Association hails decision to probe high car prices
KARACHI: Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has welcomed the decision of the government for probing higher automobile prices in the country.
The high prices are mainly due to lower content of localized parts and government’s strict tariff and taxation policy.
In a meeting held on Saturday, the senior PAAPAM members endorsed the Federal Cabinet direction to launch inquiry in this regard, saying the rates of vehicles can be reduced through full implementation of localization regime.
The imposition of regulatory duty, additional customs duty, devaluation of rupee and higher federal excise duty are major burden on the consumers of cars, they added.
“As the existing Auto Policy is to expire by the midyear, right away triggering preparations for AIDP 2021-26, it is right time to give a complete shake up to the stagnant system regulating the Automotive regime, to bring transparency and credibility to the procedures,” they demanded.
The participants of the meeting observed that Prime Minister Imran Khan has rightly pinpointed the issue, because the country is being exploited as a consumer country instead of manufacturing country. We need to “Make in Pakistan” not “Assemble in Pakistan”, they stressed.
PAAPAM fears that in absence of a transparent import regulatory system for automotive parts economic situation will have a further dip with New Entrants, coming into field and launch of Electric Vehicles (EVs) being on the doorstep.
The participants of the meeting said that the entire industry is dependent upon unregulated imports resulting in higher car prices.
They lamented that in spite of having exclusive Pakistan’s domestic market for over three decades the country has failed to achieve anticipated localization targets, leading enormous foreign exchange outflows in exchange of costly parts’ import, having no check at all.
“It’s the time to deeply analyze the root cause of high prices of cars in the country and devise a long-term strategy to timely produce the vehicles in line with demand, besides devising and implementing 10-year ‘Auto parts localization policy’ (APLP) to ensure the localization of all value-added parts.”
They said that it would result in cost reduction, reduction in lead time parts availability to assemblers and vehicle availability to consumers.
Moreover, these measures will create technology awareness, generating skilled jobs for local youth, reducing revenue loss to the government exchequers, besides forcing the OEMs to invest in inspection & testing labs to reduce lead time for approval of locally developed auto parts.
They said that the trio-government regulators in the automotive Sector namely EDB (Engineering Development Board)/MOI&P, MOC and FBR have yet to devise a transparent and coherent system for regulating imports of CKD Kits for lot many variants of vehicles locally assembled.
They said that the EDB, with its meager resources may not singularly handle the gigantic task of classifying Automotive Parts import, directly affecting vehicle prices, promoting the local industry and watching financial interests for national exchequer.
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FBR withdraws regulatory duty on cotton import
The Federal Board of Revenue (FBR) has taken a significant step to boost the textile industry by withdrawing the five percent regulatory duty on the import of cotton yarn.
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