The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday suggested increasing import duties on unnecessary imports and impose the 100 percent LC margin on preventable imports to improve the balance of payments situation.
The Government has already taken some laudable steps to restrict unnecessary imports to rescue the depleting foreign exchange reserves and curtail the widening deficits but more measures to cut imports have become imperative, it said.
Imports must be reduced which jumped to $52 billion during the last fiscal while exports dropped to $21billion which is a huge gap that calls for more measures, said Zubair Tufail, President FPCCI.
He suggested to expand the list of items importable attracting impose 100 percent “Letter of Credit” (LC) margin saying that the list of such items may be finalized with the consultation of FPCCI, he said, adding that this step would compel importers to reduce their imports due to liquidity constraints.
Zubair Tufail said that additional duties may be slapped to discourage imports to narrow the trade gap otherwise country will face serious challenges within few months.
He said that it is better to take strict measures ourselves instead of waiting for the situation to deteriorate which will leave us with only option to approach international lenders again.
He further said that local industries be encouraged instead of making Pakistan a dumping ground for other countries, as the FTAs and PTAs signed with other countries are heavily in favor of our partners and need to be reviewed. At present, under one FTA 85 percent goods are imported into Pakistan worth 15 billion dollars while our exports to that country are less than 15 percent or two billion dollars.
It is high time to make serious efforts to increase the exports from the current $21 billion to at least $25 billion in current financial year.
FPCCI supports the demand of the exporters for a reduction in electricity and gas prices as per the level prevailing in the regional countries as well as prompt payment of remaining refunds of sales tax and income tax, he said.