RD on any raw material pointed out by KCCI to be immediately withdrawn: Secretary Commerce
KARACHI: Secretary Commerce, Mohammad Younus Dagha has said that Regulatory Duty was imposed with an intention to only discourage the import of consumer goods and the Ministry of Commerce is also against imposition of RD on raw material which is the basic reason why RD on 35 raw materials has been withdrawn recently.
“The situation in terms of RD on more consumer items may worsen further in the days to come. However, any raw material subjected to RD, which is pointed out by Karachi Chamber, will certainly be taken into consideration and immediately withdrawn so that the cost of production, competitiveness and exportability of industries are not affected”, he added while speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry.
Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, Vice Chairmen BMG & Former Presidents Zubair Motiwala, Haroon Farooki & Anjum Nisar, President KCCI Muffasar Atta Malik, Senior Vice President KCCI Abdul Basit Abdul Razzak, Former Presidents Haroon Agar, Iftikhar Vohra & Shamim Ahmed Firpo, Secretary TDAP Inamullah Khan Dharejo and KCCI Managing Committee members were also present at the meeting.
Younus Dagha stated that RD is not something final which cannot be altered but the RD on consumer goods will remain intact and the situation may worsen further as enhancing exports is dearer to the Ministry of Commerce than imports. “Anyone importing consumer items should not expect any facilitation from the Ministry of Commerce. We are willing to serve the exporters day and night which is a very clear policy of the Ministry and I am speaking very openly”, he added.
Referring to concerns expressed by Zubair Motiwala on 4 percent rebate to exporters of yarn, he agreed that it was a valid demand that this incentive should not be given to exporters of yarn and the issue has also been raised by the Ministry of Commerce. “We will try to deal with it in the next budget”, he added.
Younus Dagha assured to review and look into the possibility of implementing Trade Organizations Ordinance 2007. He advised the Karachi Chamber to challenge registration of fake and bogus trade bodies under an existing legal system at the office of DGTO, whose verdict can further be appealed at office of Secretary Ministry of Commerce and can subsequently be challenged at the civil courts as well.
In reply to business community’s complaints against the Department of Plant Protection (DPP), Younus Dagha categorically stated that strictest action will be taken against individuals taking bribery under the SPS (Sanitary & Phytosanitary) condition. “DPP’s job is to get the SPS conditions implemented but if they are using it to seek bribery, I stand united with the Karachi Chamber and we will lodge cases against all such elements. Nevertheless, if we are unable to control them, we will withdraw the SPS condition”, he assured.
Chairman BMG & Former President KCCI Siraj Kassam Teli, while referring to deep concerns expressed at the meeting over FBR’s discretionary powers, stated that since Ishaq Dar presented the first budget, the Karachi Chamber pointed out numerous anomalies and continued to criticize the policies and decisions taken in the budgets for subsequent years. “Massive discretionary powers were granted to FBR officials in all these budgets and we kept raising strong voice against them but unfortunately, nobody paid any attention to KCCI’s concerns whereas all other Chambers and associations, who appreciated the budgets during initial years, have also been criticizing it since last couple of years now”, he added.
He was of the opinion that laws, regulations and acts were devised in such a manner to empower FBR’s staff even at lower level to harass the business and industrial community. A culture in all the Ministries and Departments at federal and provincial levels has been created in which unbridled powers have been granted to lower staff who are empowered to shut down factories and take biased decisions. These laws and powers were not meant to increase revenue and attract new taxpayers but to create hurdles and harass the existing taxpayers. After seeing the miseries and hardships being suffered by loyal taxpayers, people prefer to stay outside the tax net, he said, adding that those contributing highest number of taxes suffer the highest number of grievances but this culture has to change now.
He said that business community itself is responsible for most of the issues because the actual representatives were unable to give their inputs due to presence of fake and bogus trade bodies in the apex body of the country. “40 percent of trade bodies at FPCCI are fake and bogus, which were not following the rules and regulations of Ministry of Commerce in terms of paperwork and documentation whereas some outmoded trade bodies like an old Trade Body of Dry Battery and Tin Can etc. are still alive and present at the Federation, depriving and silencing the actual representatives of the business and industrial community”, he added.
Siraj Teli stressed that Trade Organization Ordinance 2007 devised under the supervision of a retired Judge was absolutely fine and it only contained some minor errors which could have been easily rectified. Numerous amendments from time to time and the implementation of TOO 2013 provided enough space to all fake and bogus trade bodies to once again become FPCCI members. “We firmly believe that TOO 2007 should be re-implemented in letter and spirit with few amendments whereas TOO 2013 should be completely reversed as it gives enough room to bogus trade bodies to take advantage of the situation”, he added.
On the occasion, Vice Chairman BMG & Former President KCCI Zubair Motiwala said that 4 percent rebate granted to the exporters of yarn has to be withdrawn as it has proven counterproductive because of the fact that yarn was not available as per requirement of the value added sector. “Although assurances were given by Ishaq Dar from time to time to remove this anomaly but no relief has been provided so far. Hence, this unjust rebate has to be withdrawn in the next budget”, he added.
He said that although Commerce Ministry is responsible to increase the exports but it is not empowered to at least identify the legitimate refunds and legitimate dues of businessmen and exporters which was not making any sense at all.
Vice Chairman BMG & Former President KCCI Haroon Farooki, in his remarks, pointed out that Commerce comes first in any developed or developing country whereas the canvas of Commerce Ministry is too wide which includes trade, industry, industrial & economic growth, employment, protection to local industry and many other aspects. Unfortunately, the Ministry of Commerce in Pakistan was not receiving much attention whereas the Finance Ministry and FBR, which is a revenue collecting authority, have all the powers and are authorized to devise policies and laws affecting trade and businesses.
He said that FBR and Finance Ministry should not be focusing on growth of commerce, economy, businesses, trade deficit, imports & exports and refunds etc. which should only be tackled by the Ministry of Commerce. Unfortunately, the Commerce Ministry has neither realized its responsibilities nor asserted its authority since last 70 years.
The business and industrial community is connected to the Department of Commerce and any law or policy pertaining to imposition of RD, protection of local industry, reduction in trade deficit and enhancement of exports should not be devised by the Ministry of Finance or FBR but the Ministry of Commerce should be solely responsible for all these tasks. Meanwhile, the Ministry of Commerce has to deal with all these tasks by devising measures in consultation with stakeholders and true representatives of trade and industry.
Speaking on the occasion, Vice Chairman BMG & Former President KCCI Anjum Nisar stressed that prior to imposing Regulatory Duties on imported items, the Ministry of Commerce must take KCCI on board so that the RD list could be mutually agreed upon and finalized as per aspiration of the business and industrial community.
He said that retaining containers of imported goods particularly by the Department of Plant Protection require special attention as the importers of various products, particularly raw material, face immense hardship due to delays in clearance of imported consignments.
Earlier, President KCCI Muffasar Atta Malik, in his welcome address, pointed out that currently, there was a dearth of a regular forum to monitor the implementation of the government’s initiatives. As many as 70-80 % of the initiatives announced in trade policies failed to see the light of the day, mostly due to paucity of funds.
“Disbursement of committed funds for promoting exports is a major issue, with trade policies being formulated by the Ministry of Commerce and their financial approval vested with the Ministry of Finance. There is a need to evolve a mechanism which ensures that decisions once taken are enforced without any delay”, he added.
He said that the tax refund issue needs to be sorted out between the Commerce and Finance Ministries once and for all. Ideally, the tax system should be such that refunds are made to the exporter in the subsequent month of shipment, or latest within the same quarter.
Director Media/ Public Relations