THE PROBLEMS OF EXPORTERS

Exports and tax registration are separate issues and should be dealt separately

From SHAMIM AHMED RIZVI, 
Islamabad

Feb 03 - 09, 2003
 

Commerce Minister, Humayun Akhtar Khan on his return from Brussels after talks with European Trade Commissioner has observed that higher input cost specially that of utilities had highly handicapped exports from Pakistan. Pakistan exporters will not be able to compete globally if the industrial electricity tariff presently higher than that of Europe remained as high after the quota regime is abolished by 2005, he warned.

Addressing a meeting of members of Pakistan Hosiery Manufacturers Association, the Commerce Minister said that WAPDA has increased industrial electricity tariff by over 100 per cent during the last 3 years. It was essential to bring down input cots like electricity to a reasonable level. He said WAPDA is devising a strategy under which it would lower the tariff at "no peak hours". The cost of energy would remain high during the peak consumption period of 5-10 p.m. and would be reduced form 10 p.m. onward to 5 a.m. WAPDA has been advised to consult the concerned industries to reschedule their working hour to avail this concession.

Humayun was critical of the change in investment policy made in 2001 when the import of machinery and balancing/modernisation was subjected to 5 per cent import duty instead of 0 per cent duty announced in the investment policy of 1997. He agreed with the exporters that Sales Tax is very serious issue. He said a strategy is being worked out in this regard and he would give exporters "good news" in a few weeks. He agreed that there are flaws in duty tax remission for exporters regime.

He said the initiation of anti-dumping duties on Pakistan bed linen was a compulsion for European Union regulators as they had received a complaint in this regard. However, Government of Pakistan has made political contacts at higher levels and assured that the duty would no be imposed. He said proceedings for imposition of anti-dumping duty would take place for another 15 months. The association is hiring best lawyers so that the case could be won on merit.

Humayun, however, advised the exporters associations to maintain vigilance against unscrupulous elements that might ship one or two consignments at low rates to trigger anti-dumping duties. The exporters should ensure that such hurdles are not created in exports. From the government side, he pledged that the exports would be made zero rates. The exporter would not be allowed to be made accountable for the taxes not paid by others. Exports and tax registration are separate issues and should be dealt separately, he added.

The minister commended the private sector for its efforts to boost the economy. He said that during his recent visit to Hiemtextil in Germany, he was pleased to see 227 Pakistani stalls. He said the stalls were of international standard and attracted a large number of visitors at the prestigious home textile fair. He said the stalls established by Export Promotion Bureau needed more decoration but were better arranged than in the past. The minister said he will visit each international exhibition in which Pakistan participates to get a first hand view of the problems faced by the exporters and to see the latest trends in export products.

He agreed to look into the possibility of permitting import of used boilers to PHMA after taking point of view of engineering sector. He also promised to consider the proposal of granting the status export-proceeding unit to industries exporting 90 per cent of their production.

Earlier, former Chairman PHMA Shahzad Azam Khan highlighted the problems faced by knitwear exporters. The issue highlighted included textile quota release, DTRE, Sales Tax refund, WTO regime, social compliance issue, market access, Expo Centre at Lahore, human resource development and import of used boilers.

Talking about his visit to rural meeting the Commerce Minister said that Pakistan's new government as determined to forge closer political and business links with the European Union, recognizing the 15-nation bloc's increasing global clout and rising role in world trade. The EU is a major trading partner for Pakistan both currently and in the future.

"Already a major outlet for Pakistani exports, the EU's trade significance was set to rise following the entry of 10 new members in 2004 and the planned removal of international textile quotas in 2005," said Humayun. Also, as a new democracy and a frontline state in the combat against terrorism, Pakistan needed continued EU help, he insisted.

Humayun Akhtar, the first minister from the new Pakistani government to meet senior European Union officials, said he had assured Commissioner Lamy that Pakistan had successfully made the transition from military to civilian rule and that Islamabad was determined to continue efforts at economic deregulation and liberalization.

The government also believed there was "room for more growth-oriented policies". Striving to remove recent strains in relations between Islamabad and Brussels, the minister said he hoped for an early ratification of a new EU-Pakistan agreement by the European Parliament.