Daily Times

KARACHI: Imposition of additional regulatory duty on 797 goods including industrial raw material would not only increase import duty but also shrink volumes of
exports due to higher production cost.

Businessmen of export oriented and industrial sector, while rejecting the imposition of additional regulatory duty, were of the view that this act of government was unjust as any duty or enhancing taxes without approval of parliament was unjust.

The present and successive governments have had the habit of taking business related decisions without taking business community on board, the real stakeholders.

The industrial export sector would have to bear additional burden of cost of doing business and additional regulatory duty would also increase import prices of value-added raw materials and other essentials of industry and trade.

It seems economic managers at the helm of government affairs remained unaware of the outcome of this decision and this attitude shows lack of planning on the part of policymakers. This would bring more economic and manufacturing problems for export industry as exporters were already under liquidity crunch and heavy duties.

Representatives of almost all chamber of commerce and industry, industrial and trade associations along with Federation of Pakistan Chambers of Commerce and Industry, All Pakistan Textile Mills Association, Pakistan Tanners Association (PTA), Pakistan Cotton Ginners Association (PCGA), Pakistan Yarn Merchants Association, Surgical Instruments Manufacturing Association Pakistan (SIMAP), All Pakistan Marble Mining Processing Industry and Exporters Association, and other industrial and importers trade organisations have opined that it was evident that government has been trying to lessen its trade deficit by bringing unannounced mini-budget, but it was not fair and was like an attempt by a newly graduate economic and financial novice.

The government should not have enhanced import duty on industry raw material and inputs for manufacturing of local products as it would cause further depression in exports on rise in production cost.

Agha Saiddain, Ghulam Rabbani, Sanaullah Khan, Shakeel Ahmad, Ibrahim Qureshi, Fazal Ahmad and Jawed Bilwani said export oriented industrial sector and commerce and trade bodies in the country had always been demanding economic managers for consultation with business people before taking such decisions but the government’s unilateral decision taking had impacted export and other industries negatively.

It is unassimilated that government has imposed additional regulatory duty on eatables including fruits and vegetables that would increase import bill, widening trade deficit further instead of controlling imports. Such steps would bring new wave of inflation as well as affect growth of business activities.

In the last fiscal year, trade deficit rose to an all-time high of $32.58 billion that represented year-on-year growth of 37 percent.

In 2013, country’s annual trade deficit was $20.44 billion. It has been continuously on the rise since then.

Imports recorded a growth of 37 percent to $4.84 billion in July, from $3.54 billion a year ago. The overall import bill rose 18.7 percent to $53 billion in 2016-17 but overall exports fell 1.63 percent to $20.45 billion in 2016-17.

The government should restrict imports of luxurious items and also increase duty as only 2 percent of the population use such costly imported items.

In addition, imposition of additional regulatory duty on various essentials would encourage smuggling of goods like chemicals and tyres etc.

Published in Daily Times, October 22^nd 2017.