Government Should Set Supply Limit on Duty Free Products from Tribal Areas

ISLAMABAD: Government is considering a limit on tax-exempt products from merged tribal districts to other parts of the country to allay concerns of the steel and edible oil industry under a scheme normal tax, sources said Thursday.

Sources said Finance Minister Shaukat Tarin had been tasked with resolving issues related to the withdrawal of Federal Excise Tax (FED) on the steel and petroleum / ghee industries operating in the former tribal areas. administered by the federal government and the provinces (FATA / PATA) proposed in the budget. 2021/22. The move has sparked opposition from industry associations outside the tribal areas who fear losing their competitive edge.

Tarin chaired Thursday a “special high-level meeting” with a delegation of industry representatives from ex-FATA areas. Defense Minister Pervez Khattak, Minister of Industry and Production Khusro Bakhtyar, Prime Minister’s Advisor for Trade Razak Dawood, Federal Board of Revenue (FBR) officials and representatives of industries from the ex -FATA attended the meeting.

The finance minister said the current government is committed to promoting peace, progress and prosperity in the ex-FATA districts.

“Peace and prosperity in the ex-FATA districts is imperative for the rest of the country. After the merger of the ex-FATA in the province of Khyber Pakhtunkhwa, the process of accelerated development of the ex-FATA districts is in full swing, ”he said in a statement.

The peaceful region is all the more important following the withdrawal of US military forces from neighboring Afghanistan, experts say.

“Industries are vital for the development of any region. The Prime Minister expressly ordered to resolve all issues facing industries in ex-FATA districts. In accordance with the Prime Minister’s instructions, the heads and relevant officials of all relevant ministries joined the meeting for a speedy solution to the problems of industries in the ex-FATA districts.

Tarin further said he would regularly hold more meetings with representatives of ex-FATA industries until all issues were resolved. He asked all relevant departments, including the chairman of RBF, to hold follow-up meetings with industry representatives from ex-FATA districts to resolve all their issues and report back at the next meeting.

Meanwhile, the steel industry, opposing the government’s decision to remove the FED on the old FATA, would be the most damaging for the entire industry in the country.

“The decision will encourage unfair competition by completely disrupting the level playing field in the steel sector. The steel industry works on low profit margins and the removal of the FED will give a huge advantage of over PKR 23,000 per tonne to the steel industry of FATA PATA over the steel industry in the rest of the country. Unfortunately, this would be an anti-competitive measure on the part of the government, ”said the Pakistan Association of Large Steel Producers. “The decision was taken barely 2/3 days before the budget under pressure from the political lobbies of the country mainly the KP and the FATA, PATA, who by remaining in the shadows are the real beneficiaries of the decision.”

Association president Javed Iqbal and chief boss Abbas Akberali said the local steel industry had only recently started to emerge from the crisis. In addition to creating a crisis for the local industry, the decision has also shocked Chinese investors, who are setting up the first steel unit in a special economic zone of Rashakai with the sole investment of a Chinese group. Following the sudden change in government policy, local and Chinese investors are worried about the future prospects of their investments in the country.

Pakistan’s long-standing steel industry supplies steel for megaprojects. Currently, bar prices in Pakistan are lower than in China, Turkey, UK, US, South Asian and Central Asian economies.

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