ISLAMABAD: The purpose behind issuance of Statutory Regulatory Orders (SROs) has been to establish a particular industry as some of the regulatory orders are specific to certain industry while others are generally aimed at enhancing import of specific items. Currently the government is contemplating reconsidering all the previously issued SROs and Finance Minister Ishaq Dar has been briefed on various options to amend to or abolish the SROs.
While the government has issued more than 59 SROs in the current financial year including 15 SROs are related to income tax, 25 to sales tax and 19 SROs are pertaining to FED.
Federal Board of Revenue (Tariff and Trade) Chief Sarfraz Ahmed Warriach gave this account while talking exclusively with Customs Today on the reconsideration of SROs.
He argued that there might be some obvious reasons for and a need to amend these SROs. He elaborated that firstly these SROs were issued to establish a certain industry and after establishment withdrawal of these concessionary regimes was a legal obligation which unfortunately could never be done for one reason or another. Secondly, the ‘lethargy’ to withdraw this protection given to industry resulted in low quality production, shunning room for improvement and innovation which, otherwise, is prerequisite for competition in the market,” Sarfraz Warriach pointed out.
He said that thirdly international competitors and world trade bodies like world trade organization also raised objections that there should be level playing field for everyone as such concessions offered to specific industry barred competitors entry into this sector besides leaving little or no more room for the manufacturing of such quality products, resulting in the cost of production.
Sarfraz Warriach also argued that more often than not, lenders stressed withdrawal of subsidies offered on a product or to industry for granting a loan as economies like Pakistan survived on loans due to the existence of huge income and expenditure gulf. “The international donors like IMF/WB/ADB, whenever provide loans, start hectic monitoring and force the borrowing economies to reduce amnesties and subsidies so that sufficient amount of taxes could be collected to ensure that instalments of the loans are paid back accordingly,” he added and cited Hillary Clinton to have categorically said during her visit to Pakistan that American taxpayers always demand why the US government doled out their hard-earned tax money to countries whose people did not pay taxes and that the American government was answerable them.”
Tariff and Trade Chief Sarfraz Ahmed Warraich said that a high level committee had been working under the chairmanship of Finance Minister Ishaq Dar and representing all the ministries and departments concerned to reconsider critically and make a way out of these SROs.
About decline in revenue collection, especially customs related, he said that due to uncertainty in the value of dollar the businessmen were not ready to take risk and of total $45 billion capital only 5 percent capital was operational. Secondly energy crisis has also dealt a blow to the purchasing power of the masses. At this same time high cost of energy has directly affected the businesses and there is very low demand for finished goods in addition to a low demand for import of raw material due to energy crisis,” he detailed.
