PM Imran approves 5-year trade policy framework
PTI govt to hand over role of tax refunds to State Bank of Pakistan
Prime Minister Imran Khan. PHOTO: PID/FILE
ISLAMABAD:
Prime Minister Imran Khan on Thursday gave the go-ahead to the five-year Strategic Trade Policy Framework that will incentivise 26 non-traditional sectors to boost exports by shifting the role pertaining to duty drawback, Drawback of Local Taxes and Levies (DLTL) and sales tax refund to the State Bank of Pakistan (SBP).
Talking to a group of journalists, Adviser to Prime Minister on Commerce Abdul Razak Dawood said he would meet the adviser to finance, State Bank governor and Federal Board of Revenue (FBR) chairman to draft a mechanism for handing over the role of sales tax refund to the central bank.
He emphasised that the new system would ensure speedy release of tax refunds to the exporters. At present, the FBR deals with the duty drawback and sales tax refunds while the Ministry of Commerce oversees the DLTL system. Under the new trade policy framework, all these subjects will be transferred to the State Bank.
Currently, the average duty drawback rate stands at 3%, which would be revised for many non-traditional sectors such as engineering, pharmaceutical, auto parts, food processing and beverages, footwear, gems and jewellery, chemicals, meat and poultry and fruits and vegetables.
The FBR is the main body dealing with tax refunds, however, exporters are sometimes unable to receive them.
Dawood said there had been a huge issue of clearing the 17% sales tax refunds.
“There is an anti-export bias in the country and wherever the export culture exists, there is no culture of taxes, levies and surcharges,” he said. “On the other hand, there is an issue of duty drawback and there has been no revision in it for the last eight years.”
Citing figures, the adviser said the export target had been set at $26 billion for FY21, $31 billion for FY22, $35 billion for FY23, $40 billion for FY24 and $46 billion for FY25.
Dawood pointed out that the trade policy framework covered 26 sectors and incentives would be provided for only the value-added sector. He clarified that the incentives for duty drawback would not be available to the textile sector. He pointed out that there was no more growth in the textile sector and Pakistan had to move away from it.
Published in The Express Tribune, March 13th, 2020.
Prime Minister Imran Khan on Thursday gave the go-ahead to the five-year Strategic Trade Policy Framework that will incentivise 26 non-traditional sectors to boost exports by shifting the role pertaining to duty drawback, Drawback of Local Taxes and Levies (DLTL) and sales tax refund to the State Bank of Pakistan (SBP).
Talking to a group of journalists, Adviser to Prime Minister on Commerce Abdul Razak Dawood said he would meet the adviser to finance, State Bank governor and Federal Board of Revenue (FBR) chairman to draft a mechanism for handing over the role of sales tax refund to the central bank.
He emphasised that the new system would ensure speedy release of tax refunds to the exporters. At present, the FBR deals with the duty drawback and sales tax refunds while the Ministry of Commerce oversees the DLTL system. Under the new trade policy framework, all these subjects will be transferred to the State Bank.
Currently, the average duty drawback rate stands at 3%, which would be revised for many non-traditional sectors such as engineering, pharmaceutical, auto parts, food processing and beverages, footwear, gems and jewellery, chemicals, meat and poultry and fruits and vegetables.
The FBR is the main body dealing with tax refunds, however, exporters are sometimes unable to receive them.
Dawood said there had been a huge issue of clearing the 17% sales tax refunds.
“There is an anti-export bias in the country and wherever the export culture exists, there is no culture of taxes, levies and surcharges,” he said. “On the other hand, there is an issue of duty drawback and there has been no revision in it for the last eight years.”
Citing figures, the adviser said the export target had been set at $26 billion for FY21, $31 billion for FY22, $35 billion for FY23, $40 billion for FY24 and $46 billion for FY25.
Dawood pointed out that the trade policy framework covered 26 sectors and incentives would be provided for only the value-added sector. He clarified that the incentives for duty drawback would not be available to the textile sector. He pointed out that there was no more growth in the textile sector and Pakistan had to move away from it.
Published in The Express Tribune, March 13th, 2020.