ISLAMABAD, June 3: The federal government is likely to reduce customs tariff on raw materials of around 200 items in the budget for 2003-04 to make the local products competitive with the imported items.

Officials told Dawn on Tuesday that a comprehensive exercise had been completed to reduce customs tariff because the government believed that most of the local products were at disadvantage only because of higher customs tariff on raw materials as compared to the imported products.

A formal announcement to this effect would be made in the Finance Bill 2003-04, the officials said, adding the time had come when no foreign lobbies should be able to protect their profits at the cost of local products.

All the players would have level-playing field to operate and survive even if it is through throat-cutting competition because the WTO regime will remove all trade imbalances.

The officials said the duty and tax remission for export (DTRE) rules would be further rationalized to facilitate the exporters, while some other tax rationalization would also be announced in the budget to enable the business community to come into the tax net.

Meanwhile, two separate delegations of the Federation of Pakistan Chambers of Commerce and Industries and SMEs led by Riaz Ahmed Tata and Umar Ghumman, respectively, held meetings with Finance Minister Shaukat Aziz to discuss budget proposals. CBR chairman and other tax officials also attended.

FPCCI vice-president Sohail Altaf told Dawn the delegation demanded that sales tax audit should be held only once in a year and excise duty should be withdrawn completely where sales tax was applicable.

The delegation demanded that all irritants relating to sales tax registration should be withdrawn and the process of refunds should be simplified and rationalized further to make them business and export friendly. The meeting was informed that the government had so far refunded Rs40 billion of exporters’ tax refunds, Mr Sohail said, but did not say how much was still stuck up with the Central Board of Revenue.

The delegation was of the view that laws should not be framed keeping in mind a handful of black sheep, who evaded tax and duties. Some other problems relating to sales tax, refund, excise and customs duty and cost of doing business were highlighted by the delegation.

The SMEs delegation accompanied by PML(Q) president Ch Shujaat Hussain also demanded incentives for the small and medium enterprises so that the sector could generate job opportunities and expand the production base.

An official statement said the business community reposed confidence in government’s investor and business friendly policies and promised to continue to work in unison with the government to increase economic growth by focusing on investment, job creation and exports.

They expressed the hope that the budget would allow even more level-playing fiscal regime to further increase investment and exports.

The minister assured the delegations that it was government’s endeavour to introduce growth oriented, business and investment friendly budget to provide an enabling hassle free atmosphere to the businessmen to participate in the economic development. He said the government would even make the tax and tariff regime more comfortable.

The coming budget would remove irritants, improve tariff regime and put in place effective and transparent tax collection mechanism to reduce businessmen interface with the tax collecting machinery.

Similarly, the finance minister said the government would encourage businessmen to come under the tax net and encourage small and medium enterprises as main driver of the economic growth to generate job opportunities.