PBC opposes removal of Fifth Schedule of Customs Act
May 4, 2019
May 4, 2019
KARACHI: In a statement issued on Friday, Ehsan Malik, CEO of the Pakistan Business Council (PBC) voiced his deep concern regarding a news item in the press on the likely withdrawal of the Fifth Schedule of the Customs Act.
The PBC, a private sector business policy advocacy forum is promoting manufacturing under its “Make-in-Pakistan” initiative. The purpose of this initiative is to create jobs, promote value added exports and encourage import substitution. The Fifth Schedule in the Customs Act which was introduced in 2013 aims to provide protection to domestic manufacturers and export industries by assuring them concessional tariffs under stringent conditions. Eliminating the Fifth Schedule, by impacting the cost of domestic manufacturing, will lead to higher inflation.
Manufacturing in Pakistan represents 12.1 percent of GDP but carries 58 percent of the tax burden. The rate of growth of manufacturing is half that of India, Bangladesh and Sri Lanka. Investment level is also well below the South Asian peers. Malik said “This is a time when industry needs to invest in capacity and gear up for exports. Withdrawal of the Fifth Schedule will work contrary to these national objectives.”
The PBC urged the Advisor to the PM on Finance to not be swayed by short-term revenue measures which are likely to cause irreparable damage to the manufacturing sector and lead to a reduction in FBR revenues, along with increased unemployment.
Published in Business RecorderDownload