The government has agreed to eliminate the charge on the import of point-of-sale (POS) equipment, which means that large retail businesses can now import duty-free.
The Federal Board of Revenue (FBR) made this statement during a briefing to the Senate Standing Committee on Finance.
The Senate Standing Committee on Finance, Revenue, and Economic Affairs met at Parliament House on Thursday under the chairmanship of Senator Muhammad Talha Mehmood to review and approve recommendations on the Finance Bill 2021-22.
The Finance Bill’s various provisions were addressed in detail at the meeting. Federal Board of Revenue (FBR) officials informed the committee that the government has decided to eliminate the tax on the import of point-of-sale (POS) equipment.
Large retail establishments will be entitled to import machinery duty-free. They informed the attendees that the import tariff on credit/debit card reader machines has also been eliminated.
They also informed the committee that the duty on pharmaceutical raw materials has been eliminated and that the duty on all pharmaceutical items has been eliminated, to which Senator Sabzwari answered that medications should now be made more affordable in the country.
The committee summoned the Pakistani Drug Regulatory Authority (DRAP) in connection with the incident. The Chairperson of the National Tariff Commission (NTC) informed the committee that significant assistance has been granted to different export industries, including textile, over the last two years.
Over 2,000 tariff lines have been eliminated so far. All raw material taxes have been drastically cut, and textile exports are expected to grow by Rs. 4-5 billion next year, she noted.
The duty on machinery and other forms of equipment has been eliminated in order to boost the country’s tourism industry. Senator Sadia Abbasi stated that theme parks are necessary to safeguard human life.
Tourism is an industry that distinguishes countries, the Chairman Committee stated. The committee accepted the clause exempting tourism from duty.
The FBR informed the committee that automobiles with a displacement of less than 850 cc are free from regulatory and additional customs duties. According to FBR authorities, the levy on imported auto kits has been decreased from 30% to 15% in order to promote the domestic auto sector.
Senator Saleem Mandviwalla commented on this, saying, “The most expensive cars are made in Pakistan; you are exempting them from duty, but there should be a pricing system.”
The committee postponed consideration of the duty relief provision for autos. The FBR informed the committee that the duty on Euro 5 has been cut as well. The committee convened a meeting with the Secretary of Petroleum to receive an update on Euro 5.
The meeting also considered the abolition of Madaraba’s income tax exemption. The committee voted against the repeal of the Madaraba income tax exemption. The committee suggested that Madaraba’s income tax exemption be restored to its prior level.
Additionally, FBR officials briefed the committee on the subject of Business Accounts. Business accounts will now be required to be declared to the FBR, according to the bill. Those who fail to declare their accounts would face penalties of up to Rs. 0.1 million in addition to imprisonment. The Chairman Committee requested revised information from the FBR about the transaction tax.
Additionally, FBR officials informed the committee that customs duties on 240 chemical tariff lines have been cut, and a 5% levy on 240 types of raw materials used in pharmaceuticals has been eliminated.
Additionally, they stated that tariffs had been decreased in order to boost tourism in the country. They said the charge on adventure tourism has been reduced by 50% and the supplementary duty has been eliminated.
Senator Farooq H. Naik expressed disappointment that all tourism help had been allocated to hilly areas. He added that assistance should be extended to coastal areas in Baluchistan and Sindh. According to the FBR spokesman, all of this relief was granted on the recommendation of the provincial tourism authority.
The Chairman NTC stated in his statement to the committee that duty on paper has been decreased this year, and that assistance has also been extended to the dairy industry.
She stated that HRC is not manufactured in Pakistan and that the regulatory duty on HRC has been cut from 12.5 percent to 5%.
She also claimed that relief has been provided to the steel industry, stating that the duty on those previously subject to a 20% tax has been cut to 16%, and the duty on those formerly subject to a 16% duty has been reduced to 11%.
According to FBR officials, manufacturing SMEs (small and medium companies) are classified into two categories: those with a revenue of less than Rs. 100 million and those with a revenue of more than Rs. 250 million.
Senator Mandviwalla expressed reservations about the ongoing churn. The committee members unanimously agreed that the turnover should be increased from $250 million 14 years ago to $500 million presently. It advocated doubling the revenue of SMEs to Rs. 400 million.
Tomorrow, the committee will reconvene to continue debates on the Finance Bill.