The Federal Board of Revenue (FBR) has devised an integrated strategy that has significantly increased exports of Pakistan from $1.6 billion (in August 2020) to $2.4 billion (in December 2020).
This shows an 18.3 percent increase in Pakistan’s exports in December 2020 compared to $1.993 billion in the corresponding month last year.
While mentioning factors that have facilitated growth in exports, FBR said that Import duties on 1,623 tariff lines, on basic raw material and intermediate goods were reduced to zero through the Finance Act, 2020.
In pursuance of this strategy, additional customs duties and regulatory duties on 164 items related to the textile sector, not manufactured in the country, were also removed in collaboration with all the stakeholders.
All these measures were undertaken with the objectives of neutralizing the adverse impact of the COVID-19 pandemic, especially for the exporters, and to make their products competitive vis-à-vis those of their competitors in the international market.
Under the “Make in Pakistan” initiative, the Duty Drawback rates for at least eight sectors were revised upwards by FBR. During the whole exercise, more than 434,000 claims were disposed of, and approximately 7,800 exporters have benefited from this Initiative.
Similarly, FBR has paid 90 percent more refunds of Sales Tax during July-December, 2020 compared to the corresponding period last year. This led to a significant rise in volumes of exports in the form of an increase in TEUs (i.e., Tonnage Equivalent Units)/Containers from 35,477 in July 2020, to 62,591 in December 2020, showing a growth of 43 percent.
To tangibly contribute to exports, all the Export Facilitation Schemes were simplified/rationalized for their optimal use by the exporters. First of all, extension in the utilization period of different export facilitation schemes was allowed for a period of one year from March 1, 2020, to February 28, 2021.
Secondly, the retention period for plant and machinery, under the Export Oriented Units Scheme, was reduced from 10 years to five years.
Thirdly, for the prompt redressal of grievances, one administrative tier was reduced (under Duty and Taxes Remission for Export Scheme and Manufacturing Bond Scheme), and the Regulatory Authority was created to facilitate the exporters.
Moreover, the investors in Export Processing Zones have been facilitated in payment of duties/taxes, on the disposal of machinery in the tariff area. These facilitation measures have led to an increase in the number of export Goods Declarations (GDs) from 71,190 in July 2020 to 79,756 in December 2020. This is an increase of 11 percent.
Furthermore, the total number of Exports GDs (from July 1, 2020, to December 31, 2020) remained at 408,472 compared to 333,943 from January 1, 2020, to June 30, 2020, showing an increase of 18 percent.
“To realize the objective of facilitation/promotion of exports, an automated system of filing the claim to the final sanctioning of Duty Drawback Claims (for the payment of Duty Drawback Claims to the exporter) was rolled out on October 1, 2020. Export Goods Declaration filed in Customs WeBOC system is being considered as the Duty Drawback Claim,” read the statement.
State Bank of Pakistan (SBP) credits the system sanctioned payments in the accounts of exporters online directly. In addition to the said automation initiative, Green Channel clearances of the exports GDs/Consignments were increased from 74 percent in July 2020 to 77.3 percent in December 2020.
Similarly, for speedy payment of Sales Tax refunds to exporters, FASTER PLUS System has been implemented. FBR has also removed regulatory duty on import of cotton yarn, till June 30, 2021, which is a basic raw material for the value-added textile industry of Pakistan.
“Committed to the national goal of an increase in exports, the Federal Board of Revenue is making all-out efforts to assist exporters by continuously making improvements in its laws and procedures,” it added.