CBR chief hints at import tariff cut - Smuggling from China
By Our Staff Reporter
LAHORE, Feb 17: Central Board of Revenue (CBR) Chairman Abdullah Yousuf has hinted at revamping the import tariff regime for combating smuggling, especially from China.
Talking to the press after making a presentation at the annual dinner of the English Speaking Union (ESU), the CBR chief admitted that small industries like pottery and shoe manufacturing were facing hard times and others, like plastic, were on the verge of closure.
He said Chinese exports had so far been an enigma for import regulators across the world. "No one knows whether public or private sector is leading the manufacturing sector. The pricing formulae of China are also not available which could enable outsiders to determine their manufacturing cost and ascertain the dumping factor."
Talking about the emerging trends in global trade, Mr Yousuf said many industries had to make adjustments and only those would survive which attained economic feasibility and produce goods at a certain "economy of scale."
"Our industry is being exposed to international competition for the first time and its strong and weak points are getting exposed," he added. He said the CBR would change the import tariff regime in the coming budget in order to discourage smuggling from China.
"The tariff protections for industry may be slashed downwards," he said. About revenue target of this year, he said the CBR was already ahead of the set target and "we are likely to cross it." It would, however, be too early to comment on the next year's revenue target, he added.
Regarding import of old and used auto parts, the chairman said: "We are supporting the import but the decision, of course, has to be made by the federal government." About the beginning of regional tax offices, he said work on the project had already been started and would be completed within 18 months.
Regarding the dwindling manufacturing of bicycle industry after massive inflow from China, he said it was because of people moving from bicycle to motorcycles. Earlier, during his presentation, the chairman said the CBR had planned to rationalize the tax system.
"Tax slab on corporate entities and banking institutions is around 41 per cent while on listed companies is around 35 per cent. The CBR plans to bring it down to a flat rate of 35 per cent by 2007-08."
Creating an enabling environment for business community in the country was the motto of the CBR so that the private sector could be lured into making investments, which would generate more revenue and create more jobs, he said.
"Strengthening of the Human Resource Management (HRM) and audit function of the institution is our main goal," he said. The chairman insisted that automation of work process to minimize contact between taxpayers and collectors was a recipe for eradicating corruption in the revenue board. "Though administrative actions do have their own utility, they have neither solved, nor they would, the corruption problems of the CBR.
"The CBR plans a round-the-clock container clarification system to support the business community. A container arriving from Bandar Abbas in 36 hours usually takes eight days to roll out from the port premises, which is sheer wastage of time for businesses in the country. The CBR wants to reduce this time to 24 hours," he added.
He also threw light on the performance, history and achievements of his department from the day of its inception in 1924. Speaking on the occasion, Shahzada Alam Munoo pleaded for fixed tax and abolition of discretionary powers, saying that they were the two ways to eradicate corruption from the tax collection system. Former finance minister Sartaj Aziz, in his speech, dilated upon the development history of the country and future prospects.
