KARACHI: The government is working on a five-year national tariff policy aimed at boosting stagnant exports and expanding the narrow export base as the country’s trade deficit has ballooned to a record high.
The policy, which would be finalised and unveiled in the next six months, will bring down tariffs on raw material and machinery imports for export-based industries.
“Draft of the tariff policy has been prepared and it will be finalised by June 2019,” announced Adviser to Prime Minister on Commerce, Textile, Industry, Production and Investment Abdul Razak Dawood while speaking to businessmen at the Karachi Chamber of Commerce and Industry (KCCI) on Saturday.
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“The policy will set tariffs for three to five years so when businessmen sit to make business decisions they are aware what will be the tariff,” he said. “Businessmen will not need to worry about it before every election; this is good governance.”
The minister revealed that a tax body would be formed comprising a minister and secretaries of the Ministry of Finance and Ministry of Industries along with other stakeholders.
He emphasised that the government had kicked off reforms in the Federal Board of Revenue (FBR) and the prime minister had backed the reforms drive.
“We have to weaken the FBR in certain ways to strengthen the tax structure which we haven’t done for the last 70 years,” he remarked.
“Every finance minister makes claims before elections that when he will be in office he will introduce reforms in the FBR, but nobody does it. Credit goes to Prime Minister Imran Khan and Finance Minister Asad Umar for the FBR reforms.”
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The minister pointed out that the tax policymaking function had been withdrawn from the FBR and given to policymakers. “It is not an easy task but it will happen,” he stressed. Physically, he said, the tax policymaking would be separated from the FBR building and shifted to the Q-block to avoid any conflict. “The struggle will go on,” he said.
“The draft of the National Tariff Policy will be presented in the cabinet for discussion; bureaucracy will fight for it; they have already said when I was discussing it that it was not possible, the budget would be disturbed without tariffs.”
In the next round, the minister revealed, the government would correct the regulatory duty which was imposed directly by the FBR without seeking the nod of parliament. “The FBR imposes the regulatory duty without considering the industry’s problems,” he said.
The minister emphasised that the next round would begin soon during which the commerce ministry would consult the businessmen. “Policymakers are going to do it but will need businessmen’s support. I don’t have trust in the bureaucracy,” he said.
Published in The Express Tribune, December 9th, 2018.
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