Dar announces incentives for boosting exports


ISLAMABAD, June 3 (APP): In line to give impetus to exports of the country, Finance Minister Ishaq Dar on Friday announced certain measures including zero-rated taxes and duties on different subsections of the sector.
Delivering his budget speech at the National Assembly, he said, country’s export potential has not been fully realized due to depressed commodity prices and slowdown in major export.
He said that certain measures are being suggested, meeting with the longstanding demand of the exporters which include:
1. To operationalize the trade policy, a total of Rs 6 billion have been allocated in the budget.
2. The existing scheme on Drawback of Local Taxes (DLTL) will continue in the 2016-17.
3. The mark-up rates on Export Refinance Facility, which was 9.5% in June 2013 will be brought down to 3.0% from 1st July 2016.
4. To encourage Small and Medium Enterprises (SMEs) to invest in new
technologies especially in non-traditional exports, a Technology Upgradation Fund (TUF) is being established.
5. Zero-rating of Export Oriented Sectors.
The export of manufactured goods in Pakistan comes from five main sectors- textile, leather, sports goods, surgical goods and carpets.
For encouragement of these five sectors, from 1st July 2016 they will be made part of zero -rated tax regime.
6. The zero-rating facility will be available on purchase of raw materials, intermediate goods and the purchase of energy i.e. electricity, gas, furnace oil and coal.
The retail sales of locally manufactured finished goods of these sectors will continue to be subjected to sales tax 5%.
7. All the pending sales tax refunds till 30 April whose RPOs have been approved, will be paid by 31st August 2016.
In the Textile Sector, he said in order to further enhance the export competitiveness of this sector the following measures are proposed in Budget FY2016-17.
1. The existing scheme on Drawback of Local Taxes (DLTL) will continue in the FY2016-17.
2. Technology Up-gradation Fund: Technology Up-gradation Fund (TUF) Scheme for the textile sector has been formulated which will be implemented from July 1st, 2016.
This scheme will particularly benefit the SMEs to invest in new technologies to make Pakistan’s exports globally competitive.
3. Duty Free Import of Machinery: The benefit of SRO 809, through which textile machinery can be imported duty free, will continue for FY2016-17 and scope would be widened to include more garment specific machinery.
This incentive, along with LTFF and TUF, would encourage new investment in textile sector to increase exports.
4. Withdrawal of Customs Duty on Manmade Fibers: Concessionary customs duty on the man-made fibers that are not manufactured locally will continue.
5. Plant Breeders Right Act: One of the top priorities of the government is to ensure provision of quality seeds to growers.
For this purpose, it is important to honor scientists with intellectual property rights of varieties they develop.
The draft law is ready which will be implemented after approval of the Parliament.