KARACHI: The government has sucked all working capital of exporters in shape of refunds of sales tax, duty drawback and income tax, executives of prime export-oriented sectors have maintained.
On the other hand the cost of doing business in Pakistan remained very high as compared to competing regional countries. And exporters are being faced load of many direct and indirect taxes on export items, Agha Saiddain of Pakistan Tanners Association, Ghulam Rabbani of Pakistan Yarn Merchants Association and Sanaullah Khan of All Pakistan Marble Mining, Processing, Industry and Exporters Association were of the view.
The tariff structure of Pakistan with other countries is not favourable. Import duty on import of leather in Japan from Bangladesh and India is zero percent and 4 percent respectively whereas an importer in Japan will have to pay 8 percent to 16 percent if imported from Pakistan.
In South Korea import duty on finished leather for India and Bangladesh stands 2.50 percent and zero percent respectively whereas import duty on Pakistani leather stands 5 percent.
It has been a sad affair that Strategic Trade Policy Framework 2009-12, 2012-15 and 2015-18 were not implemented in letter and spirit.
In Pakistan Drawback of Local Tax and Levies (DLTL) refund is called export incentive whereas it is not an incentive but simply refund of local duties, levies, and taxes.
Now the exporters are expecting a drastic change in export policy from financial managers in the government and commerce ministry.
Pervaiz Malik, federal Minister of Commerce has been requested by the exporters to bring change in order to enhance country’s exports and to shun suppliant of international donors.
Leather products exports of Bangladesh in 2013-14 were $17 billion as against exports of Pakistan $25.110 billion but in 2016-17 the exports of Bangladesh rose to $37.61 billion and country’s exports dropped to $20 billion.
The export of Pakistan in last 4 years dropped by 20 percent and exports of Bangladesh increased by 121 percent. Same is the case of Vietnam, Sri Lanka, India, etc. Former commerce minister Khuram Dastagir had failed as he could not introduce export friendly policies as Ministry of Finance never cooperated with him..
In 2013-14, exports stood at 25.10 billion, in 2014-15, export remained at $23.66 billion, in 2015-16, exports stood at 20.78 billion and in 2016-17 exports were $20.19 billion.
Kamal Nath, Commerce Minister of India said, “We (India) have decided that all products and services leaving Indian boarders will shed all duties and taxes direct or indirect within the boarders of India before such product or service leave Indian boarders”. Total export policy of India is based on this statement.
Published in Daily Times, August 22nd 2017.