Advisor to the Prime Minister on Commerce and Investment Razak Dawood said on Wednesday that the government will make sure new job creation in budget 2020-21 to execute its true vision in the country.
The advisor said to the sources that the government will follow the three-prong strategy to accomplish the objective of producing economic activity, following ‘Make in Pakistan ‘policy’ and tariff rationalization to increase export in the country.
He was asked about revenue collection. He replied that the purpose was to create direction related to revenue collection and to generate economic activity, “we will use Income Tax and Sales Tax for direct revenue collection, while import duties on raw materials for the industry will be brought down to zero”.
In addition to this, he also informed that the import duties on finished products will remain the same in this year’s budget in wake of coronavirus pandemic. However, these duties will be decreased over the next three years to promote competitiveness for export-led growth in Pakistan. This will set a foundation for improving revenue collection and encouraging industrialization in the country.
Moreover, Razak Dawood also said that a major part of revenue (approximately 50 percent) was collected through import-related duties including custom, additional customs, and regulatory duties in the past. This is greater than the share of similar revenues collected by regional countries and more than similar revenues collected by the developed economies. Razak Dawood further said that tariffs in Pakistan were greater than those of the top exporters of the world and greater than the regional competitive economies, which is affecting Pakistan’s potential.
About tariffs rationalization, he said that the government will have to decrease import duties, namely Custom, Additional Customs, and Regulatory Duties on raw materials for the industry to promote production.
Dawood also spoke about ‘Maki in Pakistan’, “I have always believed that the way forward for our country is to produce locally as well as enhance exports.” “I am sure that this is the right time to pursue ‘Make in Pakistan’ policy and we are putting in place the right elements in the upcoming budget.”