Exporters Approach SIFC Against FBR for Creating Hurdles in Export of Copper Ingots

Exporters have approached the Special Investment Facilitation Council (SIFC) against the Federal Board of Revenue (FBR) for creating hurdles in exports of Copper ingots to China under the Export Facilitation Scheme (EFS).

In a communication to Director General SIFC, Prime Minister’s Secretariat, the documented steel sector objected that instead of facilitating struggling exporters, FBR has become a major hurdle in exports of Copper ingots to China.

The letter states that exporters are running from pillar to post to get small irritants resolved in EFS but the tax authorities are not taking any decision. After getting frustrated from FBR, the exporters are making frantic appeal by knocking the doors of SIFC to intervene and resolve the industry’s pressing issues related to EFS.

The exporters of copper are facing red-tapism and inordinate delay by FBR in incorporation of required enabling provision in EFS Rules hindering copper export potential. This inordinate delay has already resulted in huge loss of foreign exchange in terms of lost exports, the letter says.

According to the letter, Pakistan has a tremendous potential for export of processed copper recovered from imported salvaged/used electrical compressors and motors. This much needed objective can be achieved by removing a small hurdle that the exporters of copper are confronting for the last one year. The best part of this whole activity is that this is a labor-intensive process and with hardly any capital expenditure (nil imported machinery) it would generate an employment of approx. over 100,000 skilled and unskilled workers. Within 2-3 years it can become the second largest exports of Pakistan after textile.

The following are the facts / hindrances being faced by copper exporters according to the letter:

(i) Steel sector of Pakistan imports steel scrap worth $2.6 billion annually.

(ii) The electrical motors being imported for purpose contain 65 percent steel scrap (by value) and 35 percent is copper (by value) which acts as import substitution.

(iii) Copper extracted out of these imported motors is further processed and exported to China. From copper to copper, the value addition in this is more than 30 percent (FBR requirement is 10 percent).

In case of processed copper export (from imported motors and compressors) the value addition should be more than 10 percent when compared with copper; (excluding steel scrap which was imported with the motors and is being used as import substitution).

FBR is required to issue a notification that “in case of processed copper export from imported motors, compressors, electrical cables 10 percent value addition would only apply to copper excluding steel imported with it”.

This is industry’s earnest appeal for intervention in this important matter for bailing-out the copper export sector out of this impasse, it added.

Published by
ProPK Staff