ISLAMABAD: The government has decided in principle to evolve an automated system for payment of customs rebate and drawback of local taxes and levy (DLTL) under the export package.

The automation include evolving of a dedicated funds at the State Bank of Pakistan for immediate payment of duty drawback and DLTL without human involvement immediately after realisation of export proceeds from the country.

On Friday, a high level meeting chaired by Adviser to Prime Minister on Finance and Revenue Dr Hafeez Shaikh to discuss various proposals for developing a mechanism for the automated payment of Customs rebate and DLTL to exporters. Currently, approximately Rs20 billion to Rs25bn Customs rebate are stuck. The amount is expected to go up in the next months owing to rising trend in exports from the country.

Under the proposed system, WeBOC and Ministry of Commerce’s system will be connected with the SBP for early payment of rebates to exporters. “We are expecting that this system will resolve the issues of exporters to a large extent,” a senior customs officer told Dawn.

He said there will be no human interaction in the proposed system which will generate the amount of rebate which will automatically transfer to the account of exporters.

To put the system in place legal changes will also be made in tax laws, the official said. An official statement issued after the meeting said that Adviser to the Prime Minister on Finance and Revenue chaired a meeting to review the proposals for the facilitation of exports oriented sectors with special focus on small and medium enterprises which can play a more vibrant role in export promotion with provision of certain facilities by the government.

Adviser to the Prime Minister on Commerce Razzaq Dawood and Ali Habib gave a detailed briefing to the participants of the meeting on improving the system of duty drawbacks and export rebates that could help with the cash flow situation of the exporters and reduce the burden through automation and reduced tiers for verification.

Other proposals included updating the lists of rate of rebates offered on different exported items and provision of funds to SBP for clearing rebates in a faster manner.

The meeting was briefed that 26 sectors, which can provide exportable materials, have put forward their suggestions for the facilitation and promotion of exports from the country and some of the proposed measures do not even require any monetary contribution from the government.

Dr Hafeez said the government aims to provide ease with maximum degree of automation and transparency to the exporters. He directed the commerce ministry to hold further discussions with all stakeholders and prepare draft proposals for making an effective policy for increasing the volume of exports from the country.

He said all possible cooperation in the matter shall be provided by the Ministry of Finance and the needful will be done in the next budget, added the announcement.

Published in Dawn, March 14th, 2020