Haroon Farooq, former Chairman KCCI, apprised the committee that goods dispatched from Karachi to upcountry areas are liable to axle load and infrastructure cess, which is in fact enhancing the cost of doing business. He argued that goods which were being dispatched in one container are now sent in 1.5 containers. He further stated that Pakistan neither framed required standards for containers nor is following international standards. He suggested that both issues be clubbed together as the business community's neck is tightened.
Senator Shibli Faraz maintained that the government departments increase issues instead of resolving issues. He sought opinion from the officials of Commerce Division and other stakeholders, enquiring how Senate of Pakistan can play its role in resolving these issues.
During discussion, Abdul Razak Dawood informed the committee that as the issue was brought into his notice, he talked to officials of Ministry of Communication and requested them to do away with axle load requirements and they have honoured his request and withdrawn it.
Haroon Farooq clarified that axle load limit has been suspended for 90 days by the Ministry of Communications and not withdrawn. He said axle load of 28 tons per containers has been reduced to 21 tons.
At this Chairman Standing Committee observed that there was confusion on the current status of axle load limit. Senator Imamuddin confirmed that the axle load limit is still in practice and big trailers are using link roads in Sangar due to which those roads are being destroyed.
Former Senator Ilyas Bilour supported imposition of axle load and cess, saying that though he is also a businessman and manufactures Ghee/ edible oil and both these elements affect him but he supports a limit of axle load and cess.
Commerce Division, in its briefing, stated that infrastructure cess imposed by provincial governments is utilized for maintenance and development of infrastructure and other activities ancillary thereto. The levying of cess has to some extent contributed towards raising the cost of doing business, which is eroding/ minimizing the competitive edge of Pakistan's exports.
Commerce Division further stated that it has supported the demand of the business community to reduce the cost of doing business because the imposition of internal infrastructure development cess/tax may create cost disparities between different regions of the country.
Commerce Division maintained that since the matter pertains to the provinces it can only recommend its withdrawal to help reduce the cost of doing business.
Senator Shibli Faraz expressed disappointment at the lack of action by the organizations concerned which are creating hurdles instead of resolving issues.
Razak Dawood apprised the committee that if axle load limit is implemented the country would have to import additional diesel up to $ 1.5 billion, and queried as to where would this additional foreign exchange come from. He stated that tax on imported raw material is unfair as it increases their input costs and that it will have substantial negative impact on export of cement.
Senator Shibli Faraz recommended that now the business community should opt to use Pakistan Railways; Abdul Razak Dawood supported the idea.
After detailed discussion, the committee unanimously asked Advisor to Prime Minister to raise this issue with Prime Minister who should convene a meeting of Chief Ministers and Minister for Communication and resolve the issue immediately. Senator Naseebullah Bazai, the mover of amendment to the Trade Organization Act, 2013 to increase the tenure of office bearers of trade bodies with specific reference to President FPCCI withdrew his proposed amendment, after almost all the Senators and representatives of different chambers opposed it. Prominent among those who opposed it was former Senator Ilyas Bilour, Haroon Farooq, A Q Khalil, Ahmad Jawad and President Attock Chamber.
There was the impression that the incumbent President FPCCI, Engineer Daroo Khan Achakzai was behind this move, however, he denied it, saying that he did not ask for any amendment. According to an official statement, Senate Standing Committee on Commerce and Textile Industry in its meeting asked the Adviser on Commerce and Textile Industry to work upon a mechanism to get rid of double and triple taxation on imports by businesses. While discussing the impact of infrastructure by government of Sindh and Government of Punjab on importers/imports, the Committee asked the ministry of commerce to take the matter up in the cabinet and bring it to the notice of the Prime Minister and suggest to him to call a meeting of the four chief ministers along with representation of the Ministry of Communications to sort out the matter of double taxation and report back to the Committee.
Secretary Commerce, DG TO, DG Trade Policy, representatives of Chambers of Commerce also attended the meeting. Leader of the House Syed Shibli Faraz proposed passing a resolution in the Senate reiterating the need to remove double taxation, asking for tax to be charged only once and a proper mechanism to deal with the issue. He was of the view that the state should be making matters easier for investors and businesses instead of complicating them.
The Committee discussed at length The Trade Organisations (Amendment) Bill, 2019 moved by Senator Naseebullah Bazai seeking amendment in Section 11(1) of the Trade Organisations Act, 2013 calling for increase in tenure of President FPCCI from one year to three years. Members of the Committee as well as the representatives from the chambers were of the view that the tenure should stay the same as the presidents who are committed can serve as good in one year as they will in any more number of years. Also, if the tenure is increased it will result in the turns of Balochistan and Khyber Pakhtunkhwa coming after even longer number of years which will be injustice to the smaller provinces. In view of the majority opinion the mover withdrew the bill.
Regarding the steps taken to diversify exports of Pakistan in particular engineering goods, the Committee was told by the Adviser that Pakistan has exported tractors to Tanzania, Kenya and Mozambique and MoU with Angola has been signed for tractors. Pakistani company recently signed MoU with a company of Angola to supply 500 tractors. Orders of water dispensers and air conditioners are also being received from Europe. The Committee was told that there is good engineering goods export potential for Pakistan in the upcoming buying expo in China in November.
