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FBR should withdraw recently imposed Regulatory Duty on essential items: LCCI President

FBR should withdraw recently imposed Regulatory Duty on essential items: LCCI President

The process to get refunds is so lengthy & cumbersome that sometimes takes months for a manufacturer or an exporter to get his own money back: Malik Tahir Javaid

LAHORE: Customs Intelligence Units of the Federal Board of Revenue (FBR) and anti-smuggling officials should refrain from conducting illegal raids. The delay in release of huge funds that run into billions has triggered serious liquidity crunch for the exporters and manufacturers that might lead to closure of several industrial units. The government should immediately resolve the issues of export-oriented industry at the earliest as in the presence of hurdles like delay in refund claims, stuck-up duty drawbacks and non-implementation of Prime Minister’s incentive package are hampering the growth of exports.

Lahore Chamber of Commerce and Industry (LCCI) President Malik Tahir Javaid, expressed these view while talking to Customs Today.  The LCCI president said that exports cannot grow in the presence of such problems therefore Federal Board of Revenue (FBR) should resolve these issues at the earliest.

“The delay in release of huge funds worth billions has triggered serious liquidity crunch for the exporters and manufacturers that might lead to closure of several industrial units,” he said, adding that authorities concerned should take realistic view of the matter and release the refunds of sales tax and income tax to exporters and manufacturers at the earliest, who are facing severe hardships. The process to get refunds is so lengthy and cumbersome that sometimes it takes months for a manufacturer or an exporter to get his own money back.

“Businessmen are bearing huge financial cost on their own hard earned stuck-up money, therefore, the FBR chairman should look into the matter and ensure early release of sales tax and income tax refunds,” he added.

The businessmen have now started feeling the pinch as the businesses are already in deep troubles and experiencing toughest times because of multiple internal and external challenges including an acute shortage of electricity and gas. And now the delay in release of their own money was adding to their miseries, Malik explained.  He said that it was a matter of deep concern that despite clear instructions to release sales tax and income tax refunds at the earliest, FBR machinery was using delaying tactics and creating hurdles for the business doing people.

While talking about abolition of Regulatory Duty, Malik said that the Chamber is active from the very first day on Regulatory Duty and meeting the people sitting on the helm of affairs and informing them that RD on various essential items including raw materials would harm the economy which is already under pressure due to rupee devaluation, heavy borrowing, high trade deficit and poor ranking in ease of doing business.

The view that the Regulatory Duty regime will not only destroy the exporting sector but will also hit the manufacturing sector hard as a number of raw materials have been subjected to new Regulatory Duty.

He said that new regulatory duty regime would be hardly doing any service to the economy. Federal Board of Revenue should totally withdraw the recently imposed Regulatory Duty, otherwise its destruction would be beyond the imaginations. He said that since various imported raw materials are being used in the local industries for manufacturing and exporting of goods therefore Regulatory Duty on these important inputs would add to the miseries of export-oriented industries. Resultantly, he said, exports would be continued to sink.

The LCCI President said that principally Regulatory Duty is imposed on such products where local industry needs protection. The LCCI understands that protection of local industry is important for any state as it provides employment opportunities and contribute sizeable amount of revenue to national exchequer. But business community fails to understand that why Regulatory Duty is imposed on import of raw materials and other goods which are either not locally manufactured or produced in very small quantity as compared to their imports.

Answering a question, he said that the country is witnessing an unstable economic situation and the business community understands well that there is no overnight solution of the economic problems but there is a dire need to set directions and to introduce economic reforms in the favor of trade and industry.

He said that government holds the responsibility to deliver and country needs to stop borrowing a few breaths in the form of funding from the international donor agencies or our debt repayments just so we can go for a few more steps yet not look for the cure for what we are plagued with.

“We must define our objectives clearly and prepare for ourselves realistic long-term strategic plans to meet these objectives. The plan must be linked to the population growth for us to deduce how much the food we require, the land needed to produce it, the schools needed to educate them, the jobs required to be created, their transportation and communication needs, hospitals to be built and so on”, he added Talking about Customs he said that Intelligence Units of the Federal Board of Revenue (FBR) and anti-smuggling officials from conducting illegal raids he said adding that it was very unfortunate that despite clear direction the bureaucracy is creating an atmosphere of harassment for the businessmen people who are backbone of the economy.

Officials of FBR intelligence and anti-smuggling units were conducting raids on the consignments of those importers who have all legal documents and followed the rules & regulations but FBR Intelligence Units and anti-smuggling officials blackmailing them for their vested interests.

Private sector was ready to supplement all government efforts aimed at revival of economic activities in the country if they are provided breathing space but in the presence of such anti-business tactics, it would be very difficult for the private sector to continue with their businesses.