|
|
| July 20, 2003 | Sunday | Jumadi-ul-Awwal 19, 1424 |
Please Visit our Sponsor (Ads open in separate window)
ISLAMABAD, July 19: Pakistan’s new trade policy unveiled here on Saturday seeks to further liberalize foreign trade and has fixed the export target for the current year at $12.1 billion and estimates the import bill at around $12.8bn, which in tandem would slash the trade deficit to less than $1bn during the year 2003-04.
The trade policy announced on television and radio by Commerce Minister Humayun Akhtar Khan offers incentives for special zones, extends the facility of export subsidy of 25 per cent till July 2004 and rewards for exporters for tapping new markets for new products.
The government has fixed the foreign trade targets on the assumptions that the exchange rate will remain stable, there will be greater access to export finance, and that the domestic and external environment will not face any new challenge.
To achieve these targets, the minister said that an upgradation fund to the tune of Rs3.74bn will be managed under public-private partnership. This fund will finance the initiatives for technological upgradation, social, environmental and security compliance, setting up combined effluent and waste water treatment plants, hiring consultants, professional marketing companies abroad, upgrading industrial clusters, warehousing Pakistani products abroad, agriculture export processing zones, special export zones, garments cities and brand acquisition. Mechanism for the operations of the fund will be developed by the ministry of commerce.
For technical management and export marketing, consultancy services will be provided at the enterprise level on a 50:50 cost-sharing basis from the upgradation fund. In the case of declining sectors, like leather and carpets, contribution from the fund might go up to 75 per cent.
The Export Promotion Bureau will engage consultants to identify, advise and assist export enterprises for entering into joint ventures (JV) with compatible JV partners in foreign countries on a 50:50 cost-sharing of consultancy services out of the upgradation fund.
Under the scheme of industrial clusters; five more clusters will be organized for sports goods in Sialkot, for surgical goods also in Sialkot, for autoparts in Karachi, for electrical appliances in Karachi and Lahore, and for knitwear also in Karachi and Lahore.
A cluster development directorate will be established in EPB, headed by D.G (Supply) in the head office and two directors (South and North) with sectoral cluster development agents for purposes of coordination with local and international stake-holders.
A training institute will be established out of EDF for training the farmers and the ginners to ensure supply of contamination-free cotton to the textile industry. Furthermore, financial support to ginners will be provided out of technology upgradation fund for improvement of ginning; the TCP will continue to intervene and procure contamination-free cotton at a premium as and when needed; quality control standard will be developed for cotton and a research centre will be established at Rahim Yar Khan for development of quality cotton.
To cope with the post-quota environment, financial assistance will be provided from the upgradation fund for relocation of textile and clothing industries, also of industries in other sectors with export potential on a 50:50 cost-sharing basis: freight expenditure: machinery/equipment transfer cost; statutory requirements: wharfage and handling; local expenditure: inland transport, offloading, insurance and agency charges; services sector and Board of Investment will remove equity restrictions from investments in the services sector.
A fund would be created which could be used as collateral for commercial banks to issue the bid and performance bonds to construction companies.
A scheme is being offered under which the EPB will hire through professional companies, specialized in the business of warehousing and marketing, to offer space in selected foreign countries to exporters free of cost for the first year, extendable on a case-to-case basis for the second year, according to eligibility criteria for exporters and for products.
Arrangements have been taken in hand for starting warehousing operations in Kenya, Poland and Sharjah and more will be made in other selected countries.
To promote export products, the EPB will arrange to hire through professional companies retail space in high-traffic shopping malls in major commercial capitals of the world.
A new scheme will be launched to enable exporters to acquire/franchise brand names. Support will be provided to exporting companies for obtaining bank loans at six months Treasury Bills auction rate + two per cent under the prudential regulations of the SBP.
An annual mega event will be held in Karachi Expo Centre, and Lahore Expo Centre (when completed), to be called EXPO PAKISTAN.
Currently, State Bank of Pakistan allows retention by the exporters to the extent of five per cent of their earnings, which was increased to 10 per cent for international advertisements’ commission.
An export facilitation inter-ministerial committee will be established, comprising the ministers of finance, commerce, industries & production, investment & privatization, the governor of State Bank, secretary commerce and chairman EPB. Secretary commerce will also act as the secretary of the committee.
A skills development council in the EPB will be responsible for overseeing and managing the training institutes established under EDF for improving the technical, managerial skills in various export-related sectors. The EPB will be re-organized to increase its effectiveness. The EPB will open a new office at Gwadar to cater to the needs of the newly created special economic zone.
To reduce cost of electricity for industrial sectors, Wapda/KESC will allow “off peak hour rates” and “bulk rates” for industrial consumers.
Establishment of Gold Assaying/Hallmarking facility is required for quality control & certification of jewellery, which will be established in Karachi in collaboration with the London Assaying Office.
The import of plant and machinery for environmental control is at present exempt from sales tax but is subject to customs duty of 10 per cent, which has been reduced to five per cent.
To recognize and reward exporters who achieve high performance in exports, a package of incentives will be provided. The 25 per cent freight subsidy facility has been extended up to July 2004 which is instrumental in product diversification and geographic expansion of exports.
At present, imports of samples of no commercial value are allowed to manufacturers-cum-exporters, at zero duty under PCT heading 9910, subject to the condition of individual value not exceeding US$50 provided there is not more than one sample of each kind or quality. Individual value limit for such samples will be raised to US$100. The individual cases beyond the increased value limit of $100 will be considered by the CBR on the recommendation of the EPB.
The export of vegetable ghee in tin pack was enhanced to 16 kg packs from current 5 kg for claiming duty drawback.
In order to leverage the export potential of agri-products and fisheries, it has been decided to establish the following: agriculture export processing zones — Sargodha, Rahim Yar Khan, Mirpurkhas, Peshawar; apple treatment plant at Quetta — grading, polishing & packaging; date processing plant at Turbat, DI Khan & Khairpur; shrimp farming facility in Balochistan; fish processing, hatcheries and canning plants at Karachi, Gwadar & Pasni; collection points and cold storage facilities for fruits and vegetables especially grapes — in Balochistan & NWFP; organic foods promotion — mapping & certification; Potatoes and onions — dehydration, cold chain, timely export management.
The concessional rate of income tax at 0.75% was applicable to export of all brands of rice in packs of up to 50 kg from current 5 kg only.
Two special export zones will be established, one at Karachi and the other in one of the industrial cities of Punjab. The commercial banks will be encouraged to arrange financing under the SBP prudential regulations at six months Treasury auction rate plus 2%. These zones will be focusing on textile sector particularly in dyeing, processing and finishing sectors.
Three garment cities in Karachi, Lahore and Faisalabad will be established. These garment cities will be owned and operated by corporate entities in which government, multilateral institutions and the stakeholders would be equity partners. The commercial banks will be encouraged to arrange financing under the SBP prudential regulations at six months treasury bills rate plus 2%.
For effective export development and trade diplomacy abroad, regional trade commissioners will be appointed for the six regions, namely, the Americas, European Union, Africa, Far East, Middle East and Central Asia.
As per current Import Trade & Procedures Order a facility has been provided to the importer to import permissible goods worth US$ 5,000 in one fiscal year through foreign currency demand draft etc., without the opening of letters of credit. Industrial users however can import spare parts and machinery worth US$30,000 per fiscal year against foreign currency demand draft, if such import is made by air or courier.
Presently actual users are permitted to import any item/ items provided the total value does not exceed US$5000 in one fiscal year. It has been decided to do away with the monetary ceiling as part of foreign exchange liberalization policy.
It has been decided to import goods for demonstration purposes on import-cum-export basis for a limited period, involving items permissible for import, without recourse to the ministry of commerce, against submission of indemnity bond or bank guarantee to the satisfaction of the Customs authorities.
Import of goods for repairs and re-export irrespective of import status will be allowed.
In order to facilitate the working of Exploration and Production Companies, It has been decided to allow import-cum-export of specific above machinery/equipment/specialized vehicles etc., (excluding super saloon cars, luxury vehicles and station wagons) on the recommendation of the Regulatory Authority against submission of indemnity bond or bank guarantee to the Custom authorities to ensure re-export of the same after the completion of the project.
The same facility will be extended to the construction companies working in Pakistan on various projects on the recommendations of the sponsoring government agencies to boost the construction activities in the country.
Import of construction machinery used in construction companies abroad irrespective of import status on completion of overseas project by Pakistani companies (excluding super saloon cars, luxury vehicles and station wagons etc.).
The overseas Pakistani are allowed to send goods which are permitted for import from their own foreign exchange earnings abroad without involvement of letters of credits and in order to facilitate the clearance of above goods in Pakistan, the consignees will be given exemption from sales tax registration.
The government allowed overseas returning Pakistani doctors under transfer of residence scheme to import used equipment dialysis machines, reverse osmosis equipment and other similar electro-medical equipment not older than five years. The import of used fork-lift trucks above five tons capacity has been allowed.
Import of boilers not older than five years will be allowed to industrial consumers. The government has withdrawn ban from import of used agricultural machinery.
It has been decided to add AISI-200 series stainless steel sheets and plates recently developed by USA for use in various components of foods, utensils, surgical, swords, knife and cutlery industry.
In order to ensure freedom from pests/diseases, import of sugar cane seeds, banana and suckers, vegetable seeds, seed potatoes, flower seeds and other field crops seeds including tubers, rhizomes, etc. will be allowed subject to drawing of seeds samples and testing quality by the Department of Plant Protection, besides the Federal Seed Certification Agency.
Import will also be allowed to all species of plants and parts thereof whether living or dead, stems, branches, tubers, bulbs, corms, stock, bud-wood, layers, slips, suckers, green scum on stagnant pool, leaves fruits etc., subject to drawing of seeds samples and testing quality by the Department of Plant Protection and by the Federal Seed Certificate Agency. Import of Pesticides etc.
Introduction of INCOTERMS - INCOTERMS, will be introduced according to the practice of International Chamber of Commerce, in import-export business/laws for global integration.
|
|
