Daily Times

KARACHI: Pakistan Electronics Manufacturer’s Association (PEMA) strongly criticized the hike in regulatory duty (RD) on electronic items saying that such measures would make local production unviable.

PEMA Chairman Muhammad Farooq Naseem urged the federal government to withdraw, with immediate effect, the RD imposed on parts, components and materials of products required by their industries.

The government of Pakistan on Tuesday imposed RD vide SRO 1035 (I)/2017 on several items.

PEMA raised strong objections about the hike and the manner in which the decision had been taken by the government. The federal government has taken this decision in haste, unilaterally and without consultation with any of the stake holders, especially our industry, PEMA said.

PEMA said if the imposition of the regulatory duty was inevitable; the relevant authorities should have rationalized the items to be selected; the percentage of duty to be imposed should have been cascaded; and adequate time given to industries to hedge their exposures and manage their production inventories. The measure reflects the ad-hoc culture of our policy makers and denies the industries of our country to have any level of trust and confidence in the affairs of their government, the PEMA said.

The federal government’s objectives, with the imposition of RD, were said to be reduction of imports and raise of additional revenues for the government exchequer. However, the relevant authorities failed to incorporate lessons from similar measures taken previously. In practicality, such policies only encourage under-invoicing, smuggling and other illegal practices and the net result is actual reduction of revenue collection, a complete failure in achieving the desired objectives, the PEMA said.

Electronics and home appliances such as refrigerators, air conditioners and televisions are not classified as “luxury” items globally, PEMA said, “Our products are classified as ‘consumer durables’, a necessity in context to modern lifestyle – urban or rural. This is evident from the fact that our products are sold throughout Pakistan, from up-market urban high-streets for the elites to the small towns & villages catering to the masses. Hence, inclusion of these products in the list of “luxury items” is incorrect and erroneous”, said PEMA.

“We are the importers of parts, components and materials required by factories to manufacture these goods in Pakistan. These factories generate huge amounts of taxes for the government and provide large scale employment to the people of our country. Imposing RD on these components, parts and materials is in absolute negation to the industrial policy of our country, and such measures shall make local production unviable”, said the PEMA chairman.

Published in Daily Times, October 18^th 2017.