KARACHI: The business community has demanded imposition of regulatory duty on items imported under the free trade agreements to protect local industry.
In its budget proposals 2014-15 for changes in the Customs laws, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that under an SRO, the regulatory duty was imposed on certain imported items, ranging from 15 percent to 50 percent. However, the regulatory order exempts the regulatory duty on imports under FTAs and PTAs.
Similarly, another SRO allows imports of certain items from China under concessional / reduced rates.
The FPCCI said that goods imported under the SROs on concessional rates of duty had been flooded in the local market, rendering local industry of such products uncompetitive. Therefore, the government should impose regulatory duty on imports under FTAs and PTAs, even imports from China.
In another suggestion, the FPCCI urged reduction in duty and taxes on smuggling-prone items for protecting local industry and realising revenue for the national exchequer.
It said that smuggling through Afghan Transit Trade / Iran and the Sust border continued unabated, which resulted in colossal loss to trade, industry and government revenue.
“Since the total elimination of smuggling only through administrative measures at the borders is difficult, the remedy lies in reducing incentives for smuggling by reducing the tariff rates on smuggling prone items to the lowest possible level,” the FPCCI suggested. This will result in higher government revenue, provide impetus to the local trade / industry and generate employment opportunities, it added, while giving rationale.
It also said that the list of smuggling prone items with the Federal Board of Revenue (FBR) should be revisited in consultation with the stakeholders.
The FPCCI also demanded reduction of duties and taxes on smuggling-prone items of spices and dry fruits.
The government has been informed that the smuggling of big cardamom, small cardamom, black pepper, white pepper, mace, nutmeg, cloves, copra, almonds and cashew nuts in huge quantities was undertaken under the umbrella of Afghan Transit Trade Agreement, Kashmir LoC trade and Quetta through Iran.
