The Federal Board of Revenue (FBR) encountered significant scrutiny during a recent meeting of the Special Investment Facilitation Council (SIFC). Sources informed Business Recorder that the business representatives from Karachi, affiliated with the Sindh Industrial Estate (SITE) and the All Pakistan Textile Mills Processing Association (APTMPA), raised concerns about the inappropriate use of the Export Facilitation Scheme (EFS).
According to the attendees, FBR has been granting authorizations to exporters who do not meet the criteria set forth in the Statutory Regulatory Order (SRO). The business representatives indicated that this oversight has led to misuse of the EFS, undermining its intended purpose.
They argued that if EFS authorizations were issued according to established Standard Operating Procedures (SOPs), the scheme could not be exploited. For example, the EFS category-A authorization is meant for those manufacturers whose exports constitute at least 60% of their total annual production over the past two years. Nevertheless, it was claimed that authorizations continue to be granted to exporters who do not adhere to this requirement.
The business community proposed that a faceless EFS authorization process be implemented to eliminate the role of agents, who they believe contribute to illegal income streams for FBR officials.
FBR officials at the meeting mentioned ongoing investigations into specific cases related to EFS fund misuse and committed to providing substantial assistance to address the matter. It was decided that FBR would collaborate with the business association to gather necessary details to prevent further abuse, with a report expected to be submitted to SIFC by January 25, 2025.
The delegation also discussed various administrative and law enforcement challenges faced by SITE, including the need for round-the-clock electricity to support industrial operations and improvements to local roads and utilities. Concerns about the poor law and order situation in the SITE area were also highlighted.
The Sindh government representative expressed a willingness to prioritize these issues, while the Home Department of Sindh pledged full support to enhance security in the industrial district. Additionally, it was agreed that K-Electric would coordinate with the Chamber to address energy-related issues urgently.
The Chief Secretary of Sindh recognized the need to tackle other administrative concerns, such as water and road infrastructure, and planned to convene meetings involving the Director General of Rangers and SITE management to improve the area’s security. The outcomes of these discussions are set to be communicated to SIFC by January 20, 2025.
Although SITE is currently under provincial governance, there is a call for the SIFC’s support in establishing a dedicated Management and Development Company. The Ministry of Commerce committed to seeking feedback from the Sindh government on this proposal by January 15, 2025.
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The association also briefed the meeting on the Export Development Fund’s (EDF) usage and sought a special grant for SITE from this fund. The Ministry of Commerce and FBR clarified that the EDF aims to promote national exports and assured cooperation in this matter. They were directed to convene a meeting with the EDF board to discuss effective use of the fund and invite suggestions from the business community, especially leading exporters, with a report due by January 15, 2025.
With global shifts towards advanced technologies, the delegation emphasized the necessity for combined effluent treatment plants in textile exports and proposed installing such facilities for textile units. A joint feasibility study on this installation was agreed upon, with findings expected by January 25, 2025.
Additionally, challenges faced by senior citizens during biometric registration for tax payments were discussed. The State Bank of Pakistan agreed to consider establishing mobile biometric counters at banks to facilitate this demographic. A working group involving SBP, NADRA, FBR, and PSW will explore this proposal, sharing their findings with SIFC by January 25, 2025.
The delegation also requested the waiving of duties on the import of biomass boilers to support the textile industry. FBR was tasked with assessing this feasibility and providing updates to SIFC by January 20, 2025.
Included in the delegation were notable figures such as Jawed Bilwani, President of KCCI, Zubair Motiwala, Chairman of PAJCCI, and others, emphasizing a collective effort to address industry-wide challenges.