ISLAMABAD, July 22: The government is considering a string of taxation measures to enhance exports during the current financial year.

Trade Policy 2002-03 announced on Monday says that an inter-ministerial committee has been constituted to examine the feasibility of setting up the input-output co-efficient organisation (IOEO) under the administrative control of Export Promotion Bureau (EPB) with the aim to assist exporters.

A same organization had been set up under the Central Board of Revenue (CBR) for fixation of duty drawback rates and their timely revision.

According to the policy, the CBR has been directed to collect export development surcharge (EDS) upon receiving remittance of export proceeds through banks, on the pattern of export income tax.

To promote exports through roads, the cabinet has accorded its approval to ratify the Istanbul Convention and accession to the TIR convention.

This along with adaptation Carnet system, would provide for easier transportation of goods to international markets by roads.

The trade policy says that duty and taxes remission for export (DTRE) rules, 2001 were being revised to make them more user friendly.

It was also intended to consult with CBR to find a way to allow duty drawback and sales tax refund on domestically procured tax-paid inputs in sectors where there was an unavoidable reliance on substantial domestic procurement.

With a workable DTRE regime in place the problem of delayed sales tax refunds would be automatically minimised, claimed the policy.

The cabinet has also approved preparation of a feasibility report for an Exim Bank. In this regard, a committee headed by governor State Bank of Pakistan and consisting of secretaries finance and commerce has been set up. The committee would submit its report to the cabinet by March 2003.

“We have just not been able to make a head way in our initiative to have warehousing abroad. We are redesigning the scheme in order to induce greater exporter interest in this important marketing tool,” said the policy report.

According to the policy, the waiver of EDS surcharge for small exporters and those who exceeded their exports by more than 10 per cent would get activated this year.

To strengthen the export of the new products, the government has notified freight subsidy of 25 per cent for new products whose annual export has not been more than $5 million in any one of the last three years.

Similarly, freight subsidy would be provided for new market — Latin America, Africa, East Europe and Oceania — or for any country where Pakistan’s total exports have averaged less than $10 million in the last three years.

According to the policy, the government has allowed the lowest rate of presumptive income tax at a rate of 0.75 per cent in respect of these new products and markets.

The government has done away with the agriculture produce cess that being levied at the rate of 0.5 per cent ad volorem on export of a number of agriculture products under the agriculture produce cess act, 1940.