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FBR to revise customs reform strategy

Updated April 02, 2017


ISLAMABAD: Expressing concern over low cross-border trade, Finance Minister Ishaq Dar has asked the Federal Board of Revenue (FBR) to revise the proposed customs reform strategy in line with the Trade Facilitation Agreement (TFA).

Commerce Minister Khurram Dastgir Khan announced the reform strategy on March 15 for submission to the World Trade Organisation (WTO) as part of the country’s commitment to reforms related mostly to customs under B and C categories.

Ahead of the announcement, the Ministry of Commerce drew up a list of TFA commitments in collaboration with the FBR.

A source told Dawn that the proposed reforms list did not go well with the quarters concerned although top FBR officials had approved it. As a result, the finance minister was asked to intervene and redraft the TFA proposals, the official added.

“Yes, we are revising our proposals,” a customs officer said, adding that the customs department is now preparing proposals to commit to a more ambitious reforms package.

The revised reforms will be notified and then submitted to the WTO. Mr Dastgir said the FBR has an independent internal approval mechanism to send recommendations to the Ministry of Commerce for further action.

About the revision in commitments for the TFA, the minister said the FBR has yet to notify what it endorsed originally.

According to an insider, the customs department has already held meetings on the revised offer with officials of the Ministry of Commerce. “We have sent the revised list to the finance minister for approval,” the official said, adding that the list will be submitted to the commerce ministry after Mr Dar’s approval.

Under the revised commitments, the official said the period for reforms in certain areas will be reduced to one to two years in place of three to five years.

The WTO launched the TFA in 2013 to ease border trade. Pakistan ratified the agreement in October 2015, which came into effect on Feb 22 after ratification from two-thirds, or 110, members of the organisation.

The member-countries committed to reforms in A, B and C categories. All reforms that Pakistan committed in the A category have been implemented after the ratification of the agreement.

A statement said the establishment of the National Single Window (NSW) is an obligation under the TFA for which the Ministry of Commerce is lead coordinator.

The NSW also involves other government institutions such as the Department of Plant Protection, Animal Quarantine Department, Pakistan Standard Quality Control Authority and Pakistan Accreditation Council, Ministry of Science and Technology.

According to the FBR, preparatory work for the NSW is complete to the extent of creating an online system for shipment coordination. The Ministry of Commerce is awaiting the final recommendations on the NSW and other TFA commitments from the FBR. Subsequently, it will consult other departments to give specific timelines for bringing their systems in sync with the NSW.

According to the letter from the prime minister’s office, the NSW will be established for managing Pakistan’s external trade. The FBR should immediately start consultations for the establishment of an information and communication technology-based NSW for cross-border trade, with the customs department as lead agency.

But according to the commerce ministry’s statement, it is responsible for commerce and international trade-related matters at the multilateral, bilateral and domestic levels.

Even after the creation of the NSW, the Ministry of Commerce will remain the main coordinating agency for all multilateral trade-related issues, including the TFA, inter-agency coordination and servicing the NSW, the statement added.

Published in Dawn, April 2nd, 2017