35% export duty on wheat products may be withdrawn

[Naveed Yaseen]

35 percent regulatory duty on export of wheat products may go
MUSHTAQ GHUMMAN
ISLAMABAD (September 15 2009): The government is likely to withdraw 35 percent regulatory duty (RD) on export of wheat products based on the fact that price of local wheat is almost equivalent to that prevailing in the international market, well-informed sources in Finance Ministry told Business Recorder on Monday. The regulatory duty was levied on export of wheat products under SRO 1185(1) 2007 of December 5, 2007.

This decision was taken by the Economic Coordination Committee of the Cabinet (ECC) on a summary moved by the Federal Board of Revenue (FBR) with the objective of ensuring smooth supply of wheat flour as well as stabilise its price in the country, the sources added.

On a summary moved by the Ministry of Food and Agriculture ( Minfa), the Cabinet allowed export of 0.2 million tons of wheat flour, Suji and Maida in June 2009. The government believes that due to bumper wheat crop this year, Pakistan will not only have adequate wheat stocks to meet domestic requirements, but will be in a position to export surplus wheat.

However, in the current global recession scenario, it would not be economically feasible to export wheat products to any country after payment of 35 regulatory duty levied by the government, the sources said. "We have proposed to the government that 35 per cent regulatory duty on export of wheat products should be withdrawn to provide level playing field to local exporters," the sources further added.

An official in the Commerce Ministry told this newspaper that Pakistan Flour Mills Association (PFMA) had been demanding rebate on the export of wheat products to Afghanistan to enable the exporters to compete in the market of neighbouring countries. The association accused the Commerce Ministry and Trade Development Authority of Pakistan (TDAP) of creating hurdles in wheat exports to Afghanistan, and urged enactment of laws and formulation of procedures that would simplify wheat exports.

The association also urged the government to take notice of route fee demanded by the political administration of tribal agencies. It is pertinent to mention here that the FBR withdrew 35 percent regulatory duty on export of wheat flour from wheat imported under "customs bond facility" for exports to Afghanistan. The FBR amended the SRO 1185(I)/2008.

The Board had notified that regulatory duty would not be applicable on flour, made out of wheat imported under customs bond facility to be exported to Afghanistan under the Ministry of Commerce S.R.O.1191 (I)/2008. Export of flour that has been produced from the imported wheat under customs bond facility would be allowed, provided the export proceeds are received in the US dollars, and the quantity to be exported is not more than the quantity of wheat imported.

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