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SCCI seeks amendments to re-import and re-export policies

  • April 22, 2023

ISLAMABAD-A leading trade and business platform has called upon the government to review and amend the rules related to the re-export and re-import of goods and machinery to facilitate traders.

The Sialkot Chamber of Commerce and Industry (SCCI) sought to bring the attention of policymakers to the two main issues faced by importers and exporters. It sought changes in the re-export limit and EOU (export-oriented unit) policies. Tajamul Hussain Sachal, Public Relations Officer (PRO) of the SCCI, told WealthPK that export processing zones (EPZs) are established all over the world to ensure ease of doing business.

“Unfortunately, the situation is entirely different in Pakistan. The conditions applied by the government make the situation worse, and the EPZs are practically not serving the purpose for which they were established,” he said.

He explained that under the existing laws, machinery, products, or raw materials imported for re-export are eligible for tax concessions for a period of two years.

“In case of exceeding the prescribed limit of two years, all duties and taxes in full, including multiple types of surplus surcharges, will have to be paid. This type of law doesn’t exist anywhere else in the world,” he elaborated.

Tajamul said the EOUs are mainly established to increase exports, transfer latest technologies (sometimes simulate foreign direct investment), earn foreign exchange, and create more employment opportunities. The EOUs are defined under the Foreign Trade Policy (FTP) as units that  export their entire production, including goods, services, and other assistance. In the case of domestic tariff area (DTA), permissible sales exclude activities such as good manufacturing, repairing, re-engineering, rendering, and reconditioning.

The SCCI spokesperson shared that under the EOU policy, there is no tax or customs duty on the import of machinery or processing plants. Although, it is a good favour on behalf of the Government of Pakistan, but when the same machinery is re-imported in case of expiry or upgradation, a full duty is demanded by Pakistan Customs. He said this issue needs immediate attention from policymakers.

Tajamul said quick attention is needed to avoid the difficulty regularly faced by traders. He said the government must facilitate traders to ensure swift industrial development in the country.

“The industry is a strong mechanism to keep the economy on a sound footing. Increased exports keep the industrial sector flourishing. Policy adjustments are needed to boost the flow of revenue generation and foreign exchange earnings of Pakistan,” he added.

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