Prime Minister Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood said on Tuesday that the government will make provision of Master Bill of Lading (BL) mandatory instead of a third country Bill of Lading to get rid of under invoicing. He was replying to questions raised in the Senate Standing Committee on Commerce and Textile, presided over by Senator Mirza Muhammad Afridi.
Prime Minister”s Advisor stated that presently Pakistan is exporting its textile products to traditional markets and not a player in big markets. He said under invoicing is hurting Pakistan”s import revenue as actual value of products is not shown in the invoices and products are being imported through third country like Dubai. “We are making master BL mandatory for imports in the forthcoming Textile Policy. There is no textile industry in Dubai then how BL is originating from there,” he added.
Senator Syed Shibli Faraz said that invoices are changed in Dubai or at the airport/port and this instrument is used for under invoicing or money laundering. He cited the example of IT products which are heavily under invoiced as different dealers show different prices of similar products, suggesting that invoice from the parent company should be made mandatory.
“I raised this issue of IT products to the FBR on basis of data till March, 2018 taken from Weboc to ascertain under invoicing but nothing has been done by the revenue collecting agency. If FBR does not sort out this issue then what is that telling us? Ours time is very precious,” he said.
Shibli Faraz further stated that shell companies have been established in Dubai which are then used for money laundering or under invoicing, adding that this practice is hurting Pakistan”s revenue, he added that he knew of cases where alteration has been done even in Letters of Credit (LC).
Senator Nauman Wazir Khattak said that invoices of Original Equipment Manufactures (OEM) should be made necessary to do away with under invoicing.
“The issue of under invoicing was also discussed which is damaging the economy and revenue generation as well as giving way to money laundering. The Committee observed that this comes under the Federal Board of Revenue but it effects commerce division and decided to call the FBR as well to the next meeting,” said an official statement.
Senator Nauman Wazir said all the concessions are being given to the textile sector due to which this sector has become inefficient.
“Textile sector is like a spoiled child who is getting all concessions due to which it is inefficient in productivity, energy use and processing,” Senator Khattak said, adding that concessions should not be for the entire textile sector but only for garments and value added sector. He acknowledged that All Pakistan Textile Mills (APTMA) is very powerful and that Bara markets also exist in the country. Senator Wazir proposed that next time FBR should be called to the next meeting.
The PM Advisor said that he has requested Foreign Minister, who was in Japan on an official visit, to request Japan that out of total loan, some part should be extended to textile sector for machinery procurement at low interest rate. Pakistan has also conveyed to Japan if it does not extend loan for machinery at lower rates then we will purchase machinery from Germany.
Senator Shibli Faraz cited one of his studies that revealed that export of Pakistan”s textile sector has not increased from $ 1.2 billion per month during the last twenty years despite the fact that the word “value addition,” is even known to a child in North Waziristan. He queried as to where the problem lay to which Abdul Razak Dawood commented that his frustration is equal to that expressed by Senator Shibli Faraz, adding that he is discussing ways to increase exports.
Razak Dawood said, he recently visited Turkey and discussed different FTA proposals with his Turkish counterpart, but Turkey refused to discuss textile and leather. He said, FTA-II with China will be signed on April 28, 2019 during the visit of Prime Minister of Imran Khan. He said, China has granted duty free access on 313 items including washing machines, fans, refrigerators, chemicals, plastic etc.
Replying to question about quality, he said that there is no mention of quality, adding that for the first time, Pakistan will get market access to China equal to ASEAN which was Pakistan”s demand and now it is our duty to compete with other countries with respect to quality. Chairman Standing Committee drew the attention of Prime Minister”s Advisor towards garments factories which are shutting down due to higher price of yarn. He said a company which got an order of $ 800 million from eight international companies has shut its operations due to higher yarn prices, adding that M/s Zara has stopped giving orders to Pakistan as Pakistani suppliers are unable to meet orders and some of them are thinking of relocating to another country. Abdul Razak Dawood replied that there are a number of issues, but one door (China) has opened which will benefit Pakistan”s exports. He said that a mechanism would be made aimed at ensuring supply of yarn to garment factories and for export. He further stated that the government is changing the policy of long-term financing and now garments factories will also be made eligible to avail the facility of building and purchasing machinery.
Razak Dawood further stated that around 100 delegates from other countries would be visiting China when the FTA will be signed on 28 April. The FTA with China will give Pakistan the same status as other ASEAN countries enjoy. After the FTA is signed it will be up to Pakistani businesses to provide good quality products to meet their competitors. The committee noted that there is a need to carry out value chain analysis of textile industry.
The meeting was told about details of the number of persons working in Textile Division, its attached departments, authorities, corporations, autonomous/semi-autonomous bodies and organisations on a question of Senator Mir Kabeer Shahi. The committee members sought details of proper observation of quota in all the departments and also asked to bring a thorough job description and justification of the huge human resources employed under the ministry. The ministry was directed to fill all the vacant posts on Balochistan”s quota within three months.
The committee Chairman observed that the National Textile University Faisalabad is working well but there should be a mechanism for proper commercialisation of the research products and there should be a linkage of academia and industry. He said that textile engineers in Pakistan are still working on raw cotton and do not have proper knowledge of synthetic cotton. The Advisor assured the Committee that the ministry is taking steps which will increase ”our international market share”. The Committee deferred briefing to be given by TDAP due to some anomalies in the presentation and absence of senior officials who are in China for FTA signing engagements.
Besides others the meeting was attended by Leader of the House Senator Shibli Faraz, Senator Nuzhat Sadiq, Senator Nauman Wazir Khattak, and Senator Ghous Bakhsh Niazi.
Source: Business Recorder