The business community has said that Pakistan is more fortunate than many other countries in terms of recovering from the pandemic, hence the post-Covid environment presents a golden opportunity to the country to rationalise its tariff structure in a bid to enhance its presence in the global market.
Speaking to The Express Tribune, Karachi Chamber of Commerce and Industry (KCCI) President Shariq Vohra said that government’s plan to rationalise tariffs to spur industrial growth had a massive potential to uplift the economy provided that the leadership acted in a timely manner.
He pointed out that the Ministry of Commerce was preparing to begin a new round of tariff rationalisation to boost industrial growth.
“The sectors which will be focused under the scheme include iron and steel, automobile, packaging material, agriculture, footwear and plastics,” he said.
“By rationalising tariffs, Pakistan can make significant progress in export diversification, an area which the country has struggled to improve for a long time.”
He lamented that the lack of development in export diversification coupled with rising dependence on imported raw material was hindering the expansion of Pakistan’s manufacturing portfolio and damaging the country’s external account.
According to him, local industries cannot establish manufacturing facilities in new sectors of the economy if they are aware that potential customers will get a better deal by importing relevant goods.
“The business and industrial community is very keen to help the government in streamlining tariffs,” Vohra underlined. “Now, it is the responsibility of the leadership to ensure that the recommendations are implemented and businessmen are provided a conducive environment for industrial expansion.”
He was of the view that tariff rationalisation without eliminating other barriers would not yield the desired results.
Although the government has streamlined a number of procedural requirements over the past few months to steer ease of doing business, tariffs are still acting as a major hurdle for some industries in realising their true potential, he said while welcoming the tariff rationalisation plan.
Pakistan Association of Automobile Parts and Accessories Manufacturers’ former chairman Mashood Khan termed the tariff rationalisation an excellent initiative for the manufacturing industry, especially the automobile sector.
He cited that a majority of the raw material required to produce auto parts was imported. “Currently, the competitive edge for exporters in the auto engineering industries is the low-cost labour, but with tariff rationalisation they will have a chance to enhance their target market price,” he said.
He expected a positive decision in this regard, highlighting that the government had held successful consultations with the industries and conducted a detailed study.
The automobile sector stakeholder recalled that tariff rationalisation had been on the cards for the past one year and it was aimed at improving the competitiveness of industrial output in the global market and boosting the ease of doing business.
“With successful tariff rationalisation, the government will abolish additional customs duty and regulatory duty on 30,000 products, which are used as raw material,” he said.
Pakistan Association of Large Steel Producers (PALSP) Secretary General Syed Wajid Bukhari pointed out that in several meetings with the government over the past one year, steel producers were assured that duties and taxes on primary raw material would be removed or reduced drastically.
Published in The Express Tribune, September 12th, 2021.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ