The National Assembly Standing Committee on Industries and Production has been informed that the budget exercise which should have been concluded in January 2018 was so delayed that in fact proposals were received by FBR on April 13, 2018 at 4 p.m. when FBR has already completed its work.
"While the naivety of EDB acting CEO in sending proposals for the federal budget to FBR a week ago, two months late from the deadline, implies that it is not necessary for FBR to examine the concessions requested by the engineering industry to survive in the presence of FTA's in place which especially target the growth of the local industry," said one EDB Board member.
The proposals submitted include addition to Sales Tax Act 1990 where a small modification will not allow sales tax paid on imported machinery which is made locally to be adjusted as input tax instantly providing an incentive to buyers to switch to local production. The industry has proposed restoration of concessions on imported raw materials and components as earlier available in SRO 565 as they were well justified in view of tariff under FTA's for similar machinery.
The EDB Board member further stated that what FBR must consider aggressively is the depreciating Pakistan currency and that machinery is a very large part of our imports. He said, the solution lies in import substitution and indigenisation for which FBR must necessarily revisit its existing mechanism and provide economic advantage to produce locally made machinery but also provide incentives to Pakistani buyers; for example reducing Sales Tax to a nominal value thereby encouraging localisation.
Mian Sohail, EDB Board member, in a written fact sheet informed the National Assembly Standing Committee that in fact there is no automobile professional at the EDB due to which obsolete junk technology is being approved by the Ministry of Industries and Production on the recommendations of the EDB. He also recommended removal of acting CEO immediately as rules do not allow such an appointee to work for extended periods.