Sales tax, customs duty on import of textile machinery, cotton abolished; PM says development of agricultural, industrial sectors to make country prosperous;
govt believes in freedom of media, does not want to impose restrictions; some channels give impression as if we are heading towards disaster; channels that want national development gaining popularity; people don’t trust channels spreading despair
ISLAMABAD: Sensing the negative fallouts of dwindling sale of Pakistani products abroad on the country’s economy and its financial health, the government on Tuesday announced Rs180 billion incentive package to exporters to boost the country’s exports by around three billion dollars by end June 2018.
Under the package, sales tax, customs duty on import of textile machinery and cotton have been abolished. The country’s total exports between 2013 and 2015 have declined by more than 12 percent. The Pakistan Bureau of Statistics (PBS) has recently reported total exports at $9.912 billion from July to December 2016. This figure is 3.82 percent lower than the total exports of $10.306 billion reported for the corresponding period in 2015.
The announcement was made by Prime Minister Nawaz Sharif here at the Prime Minister Secretariat’s auditorium on Tuesday amid a thunder of applause by the leading exporters and business personalities. The prime minister is hopeful that the package would ensure hundred times in return in the shape of increase in exports. The ceremony titled as “Prime Minister Trade Enhancement Incentives” was held after a marathon discussions with the representatives of the exporting outfits with Nawaz Sharif and relevant federal ministers where the premier agreed to accept all of the demands made by the exporters.
The prime minister expressed the confidence that the package would help achieve the objective of export-led growth. Many challenges including terrorism, lawlessness, energy shortage, poverty and unemployment were confronted by the incumbent government when it assumed the reign of authority, the prime minister said and added that his government took bold measures to brace these challenges and today an all-round improvement is visible.
He said that dozens of power plants are being installed under the China Pakistan Economic Corridor (CPEC) besides many others being financed by the government of Pakistan. He said the objective is to ensure availability of cheaper electricity on sustainable basis. He said 10,000 megawatts electricity would be added to the system by next year and 30,000MW within the next few years.
The prime minister said the government has decided to fund the Bhasha Dam from its own resources which would generate 4,500MW cheap electricity. He said its power house would be built under CPEC.
Nawaz said Pakistan Railways is also being revamped and upgraded with an investment of $8 billion. He said the improvement plan envisages doubling the speed and halving the distance between Karachi and Peshawar.
The prime minister said a network of roads, highways and motorways is being laid at a cost of one thousand billion rupees integrating different regions of the country. He said the interest rate is lowest in the history of the country and the government is facilitating investors. The prime minister said his government has announced a package for agriculture and now a package for industry has been given. He hoped that development of these sectors would help in overcoming problems like unemployment, ignorance and backwardness and put Pakistan on fast track progress.
Highlighting his government’s achievements, Nawaz Sharif said industries of the country are facing no loadshedding and they are receiving electricity and gas without anyinterruption. “Had the previous governments focused on energy shortage, the country would not have faced darkness,” he remarked.
“Previous governments did not do anything, that’s why the country is facing a crisis.” He called electricity deficit the country’s biggest problem and acknowledged that its tariff should go down. “We are moving forward on that front,” he said. He boasted that now electricity tariff stood 26 percent cheaper compared to the tariff during the days when he assumed the office. At the beginning of next year, he said, 10,000 megawatts electricity would be added to the system. And in the next few years, he said, power production will go up by 30,000MW. In that regard, the premier cited the work continuing on dozens of energy projects under CPEC. Turning to highways and motorways, he said, a six-lane motorway was being built between Islamabad and Karachi, whereas Karachi-Hyderabad motorway would be completed this year. He expressed confidence that the package will help achieve the government's objective of export-led growth. The prime minister informed the business community that the under-construction motorway between Karachi and Hyderabad will also be completed this year. With that the time consumption would also reduce to half, he said.
The premier said interest rates are currently at their lowest in the country's history, which will facilitate investors in taking up new projects. Speaking on unemployment, he said he hoped growth in Pakistan’s agricultural and industrial sectors would help absorb unemployment and put Pakistan on the fast track for growth and prosperity.
The prime minister said the government believes in freedom of media and don’t want to impose any restrictions on it. He said criticism should be made for reform. He said the media should not create an environment of despair. He said when we see media in the evening, it gives an impression that we are going towards disaster. However, he said, all the media channels are not like this.
The premier said some channels want national development and such channels are gaining popularity now. He said people never trust channels which are spreading despair.
In his speech, Finance Minister Ishaq Dar said the prime minister has accepted all demands of the business community. He said the government is providing liberal incentives to the business community and it is now responsibility of the exporters to increase exports significantly. Ishaq Dar said that the government is providing liberal incentives to the business community. He asked exporters to ensure that exports are increased to 10 percent of GDP.
Meanwhile, Commerce Minister Khurram Dastagir Khan at a news conference here said the government has offered a historic package to enhance exports, which would cost Rs180 billion and will span over 18 months, starting from January 2017 to June 2018.
This will not only boost the exports and our products’ competitiveness in international market, but also lower the cost of doing business.
Under this package the exporters will be liable to increase exports by five percent from January to June 2017 and then by further 10 percent in financial year 2017-18. The minister said this package would generate employment opportunities and revive closed factories of the country.
While presenting the salient features of the package, the minister said that under this package, the duty drawback for garments would be seven percent, textile made ups six percent, processed fabric five percent, yarn and grey fabric four percent, sports goods, leather and footwear seven percent and carpets and tents five percent. Similarly, the government abolished import duty on cotton and also abolished customs duty on man-made fibre other than polyester and sales tax on import of textile machinery has also been abolished.
“There will be no condition on getting duty drawback in first six months (January to June) of the scheme. However, exporters will have to record 10 percent growth in exports during next fiscal year 2017-18 as compared to the ongoing financial year,” he said.
He said the package would enhance the country’s exports by $2.5 to $3 billion by the end of June 2018. Prior to the incentive package, the government had already reduced the power tariff for the industries from Rs15-16 per unit to Rs11 per unit. Similarly, the government is providing uninterrupted power supply to the industries in the country, he added.
The minister said the government had already given zero-rated facility to five export sectors in the budget. The government would give the duty drawback facility through State Bank of Pakistan.
