FPCCI demands higher duties on unnecessary imports

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has suggested increase in import duties on unnecessary imports and imposition of 100 percent L/C margin on preventable imports to improve the balance of payments situation, a statement said on Tuesday.

The government had already taken some laudable steps to restrict unnecessary imports to rescue the depleting foreign exchange reserves and curtail widening deficits, but more measures to cut imports have become imperative, the FPCCI said.

Zubair Tufail, president of the FPCCI, said that imports must be reduced, which jumped to $52 billion during the last fiscal year, while exports dropped to $21 billion, which is a huge gap that calls for more measures.

He suggested expansion in the list of import items by imposition of 100 percent letter of credit margin, and said the list of such items may be finalised in consultation with the FPCCI representatives. This step would compel traders reduce their imports due to liquidity constraints, he added.

Tufail said that additional duties may be slapped to discourage imports to narrow trade gap, otherwise the country will face serious challenges within next few months.

“It is better to take strict measures ourselves instead of waiting for the situation to deteriorate, which will leave us with only option to approach international lenders again,” he said.

The apex body president also said local industries should be encouraged instead of making Pakistan a dumping ground for other countries, as the free trade agreements (FTAs) and prefrentialk trade agreements (PTAs) signed with other countries are heavily in favour of partners and need to be reviewed.

At present, under one FTA, 85 percent goods are imported into Pakistan worth $15 billion, while exports to that country are less than 15 percent or $2 billion.

It is high time to make concerted efforts to increase exports from the current $21 billion to at least $25 billion in the current financial year, he suggested. The Federation of Pakistan Chambers of Commerce and Industry supports the demand of the exporters for a reduction in electricity and gas tariffs as per the level prevailing in the regional countries and prompt payment of remaining refunds of sales tax and income tax, he added.