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Interministerial meeting on simplification of export facilitation schemes

Islamabad, May 22, 2019: Secretary Commerce Sardar Ahmad Nawaz Sukhera chaired an inter-ministerial meeting on simplification of export facilitation schemes i.e. Duty and Tax Remission on Export, Bonded Warehouse, Manufacturing Bond and Export Oriented Units. The prominent exporters from different sectors and representatives of FBR, Textile Division, National Tariff Commission and leading trade bodies i.e. Pakistan Readymade Garments Association, All Pakistan Textile Mills Association, Pakistan Leather Garments Manufacturers and Exporters Association, Towel Manufacturers Association, and Pakistan Gloves Manufacturers Association attended the meeting.

Briefing the meeting, Director General Trade Policy, Muhammad Ashraf stated that the Commerce Division had conducted a series of consultations with the stakeholders on improving the utilization of export facilitation schemes under which the exporters were allowed to import duty free raw materials for export-oriented production. Since the compliance regime under the schemes was cumbersome, only the large firms were able to benefit from these schemes excluding the SMEs from access to duty-free raw materials. Around 75 percent of the benefits under these schemes were bagged by only 250 firms. It was, therefore, important to remove the excessive restrictions to enable the SMEs to benefit from the schemes.

The participants highlighted that certain products like artificial leather and fabrics needed to be included in the schemes. The schemes should be customized for each sector instead of keeping them as one-size-fits-all. The utilization period of raw materials for engineering products should be increased from 12 to 24 months. The audit, required under the scheme, should be completed within a short period and there should be a gap of at least three years between audits for the compliant firms. The accounts of the raw materials imported and utilized under the schemes should be managed through digital platforms rather than physical checking.

Secretary Commerce said that the Commerce Division was striving to improve the export facilitation schemes in consultation with FBR and stakeholders to make those user-friendly and transparent. After the schemes are simplified Commerce Division, along with FBR, will hold awareness sessions for the exporters to educate them on benefiting from the schemes.

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