TRADE POLICY OF PAKISTAN
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TRADE POLICY OF PAKISTAN Presentation Transcript

  • 1. FINAL PRESENTATION FINANCIAL MARKETS
  • 2. GROUP NAME: DEFFENDERS GROUP MEMBERS: FATIMA 0006 SIDRA 0009 NEELAM 0010 (L) BENISH 0011 IQRA 0016 FAREEHA 0017
  • 3. TRADE POLICY OF PAKISTAN
  • 4. INTRODUCTION Trade policy is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. The purpose of trade policy is to help a nation's international trade run more smoothly, by setting clear standards and goals which can be understood by potential trading partners. Things like import and export taxes, tariffs, inspection regulations, and quotas can all be part of a nation's trade policy. Some nations attempt to protect their local industries with trade policies which place a heavy burden on importers, allowing domestic producers of goods and services to get ahead in the market with lower prices or more availability.
  • 5. TRADE POLICY OF PAKISTAN In order to address the challenges confronting Pakistan on the economic fronts, Ministry of Commerce has launched a comprehensive three years Strategic Trade Policy Framework (2012-15) document. It would provide the reference to different trade measures by the Ministry of Commerce and other ministries from time to time. The overall objective of the STPF is to achieve sustainable high economic growth through exports with the help of policy and support interventions by the government, industry, civil society and donors.
  • 6. WHO MAKE IT The latest trade policy announced by the government of Pakistan was the strategic trade policy framework for the year 2012-2015. Prime Minister Raja Pervaiz Ashraf approved the Strategic Trade Policy Framework 2012-2015 Makhdoom Amin Fahim, Minister for Commerce, announced the policy after getting formal approval from the cabinet.
  • 7. SALIENT FEATURES OF STRATEGIC TRADE POLICY 2012-2015 ARE: Mark-up support for future import and purchase of machinery , Export finance scheme for selected export sectors, Ad hoc relief at 3%of Freight on Board (FOB) to offset the impact of high cost of utilities in selected sectors, Establishment of Export Import Bank (EXIM Bank) to increase exports and make them competitive with regional competitors such as India and Bangladesh, Promotion of service sector through institutional arrangements, Promotion of regional trade especially trade with China, Iran and Afghanistan, Mobilization of new investment in export oriented industry with establishment of Special Economic Zones.
  • 8. NEXT PRESENTER FATIMA
  • 9. TARIFF AND NON TARIFF BARRIERS TARIFF BARRIERS: A tariff designed to make imports more expensive than domestically produced products. That is, a tariff barrier is a tax imposed upon imports to protect local industries and companies. NON TARIFF BARRIERS: Any measure other than high import duties (tariffs) employed to restrict imports. Non-Tariff Barriers include all measures, other than tariffs, that are used to protect domestic industry and discourage imports.
  • 10. REASONS FOR TARIFF: To protect newly established domestic industries from foreign competition. To protect aging and inefficient domestic industries from foreign competition. To protect domestic producers from "dumping" by foreign companies or governments. To raise revenue.
  • 11. LIST OF TARIFFS IN PAKISTAN Following are the tariffs in Pakistan: 1 Import duty 2 Export duties 3 Regulatory duties 4 Additional customs duty
  • 12. TYPES OF TARIFFS AND TRADE BARRIERS There are several types of tariffs and barriers that a government can employ: Specific tariffs A fixed fee levied upon one unit of an imported goods is referred to as specific tariff. Licenses It is granted by the govt to the business to import certain type of product. Import quotas It is associated with the issuance of the licenses. Voluntary export restraints It is created by the exporting countries rather than importing countries. Local content requirements In this restriction can be percentage of goods or a percentage of the value of the goods.
  • 13. NON-TARIFF BARRIERS TO TRADE CAN ARISE FROM: Unreasonable/unjustified packaging, labeling, product standards Quota shares Quality conditions imposed by the importing country on the exporting countries Product classification Import bans Import licenses General or product-specific quotas Complex/discriminatory Rules of Origin Fixation of a minimum import price
  • 14. NEXT PRESENTER SIDRA
  • 15. BASIS OF IMPORTS  (1) Imports may be made against all modes of payment subject to procedures prescribed by the State Bank of Pakistan.  (2) Private sector importers may enter into Commodity Exchange Arrangements with suppliers abroad subject to the procedure notified by the State Bank of Pakistan
  • 16. IMPORT OF GOODS  Import of all goods is allowed from worldwide sources unless otherwise elsewhere specified to be banned, prohibited or restricted in this Order:  Provided that the amendments brought in this Order from time to time shall not be applicable to such imports where Bill of Lading (B/L) or Letters of Credit (L/C) were issued or established prior to the issuance of amending Order.
  • 17. IMPORT OF USED PLANT, MACHINERY AND EQUIPMENT.  (1) Plant, machinery and equipment in new or used or refurbished condition is allowed for relocation of complete projects in all industrial sectors except for industries  (2) Spare parts on the regular inventory list of projects being relocated is also permissible for import, whether new, old, used or secondhand
  • 18. Gwadar special economic zone  Admission of goods into Gwadar Special Economic Zone from abroad and from the tariff area shall be allowed in accordance with the rules and procedures to be notified by the Federal Government.
  • 19. Basis of exports  Exports from Pakistan shall be made under the foreign exchange rules, regulations and procedures notified by the State Bank of Pakistan, from time to time, and upon submission of such documents as may be prescribed.
  • 20. Relaxation of prohibitions and restrictions  (1) The Federal Government may, for reasons to be recorded, allow export, export-cum-import or re-export in relaxation of any prohibition or restriction under this Order.  (2) The Federal Government may issue authorization for export, export-cum-import orre-export in respect of any item. The authorization so issued shall be on its letter head, consecutively numbered and duly embossed which shall be valid for a period of six months unless otherwise specified.
  • 21. Export-cum-import Imported items may be exported for purposes of repairs, replacement, or refilling of cylinders and ISO tanks subject to submission of indemnity bond to customs authorities undertaking that goods being exported shall be re-imported after repairs, replacement, or refilling
  • 22. Exports from Gawadar Special Economic Zone  Export of goods from Gawadar Special Economic Zone to foreign countries and to the tariff area shall be in accordance with the rules and procedures to be notified by the Federal Government.
  • 23. NEXT PRESENTER BENISH
  • 24. EXPORTS OF PAKISTAN •Raw cotton ,textile products & cotton yarn •rice •Leather & leather products •Carpets & rugs •Synthetics textile •Sports goods •Readymade garments •Vegetable ,fruit& fish •Engineering goods •Chemicals & pharmaceutical product
  • 25. PROCEDURE FOR EXPORTS NTN National Tax Number Certificate, which is issued by the Income Tax Department on filing of application form accompanied with one attested copy of NIC. SALES TAX REGISTRATION Commercial exporter is not required to register with Sales Tax Department. But if you pay the sale tax on the goods from local market it will be better for you to get yourself registered with sales tax department so that you may claim your input tax deducting on your purchases.
  • 26. BANK ACCOUNT Current Bank Account is required for export proceedings and documents. CHAMBER MEMBERSHIP Membership certificate of Chamber of Commerce and Industries or any relevant trade association is required.
  • 27. DOCUMENTS FOR CLEARING AGENT Once the consignment, to be exported arrives at the port, usually a clearing agent services are sought. The following documents are required to provide to clearing agent to clear the consignment.  Packing List.  Commercial Invoice.  Letter of Credit (L/C).  Certificate of Origin which is issued by Chamber of Commerce.  National Tax Number Certificate.
  • 28. Form “E” Form “E” (State bank form) All exports from Pakistan which are subject to Foreign Exchange Regulations are required to be declared on form „E‟ which is in sets of four copies each. The exporter should submit the full set of Form „E‟ to the bank after it has been completed and signed by the exporter himself or his authorized agent. SUBMISSION OF EXPORT DOCUMENTS TO BANK All shipping documents covering goods exported from Pakistan and declared on form “E,, must be passed through the medium of bank within 14 days from the date of shipment.
  • 29. IMPORTS OF PAKISTAN  Machinery  Petroleum  Chemicals  Vehicles & spare part  Edible oil  Wheat  Tea  Fertilizers  Plastics material  Paper board  Iron & steel  Pharmaceuticals product
  • 30. PROCEDURE OF IMPORTS NTN National Tax Number Certificate, which is issued by the Income Tax Department on filing of application form accompanied with one attested copy of NIC. Bank Account Current Bank Account is required for import proceedings and documents. SALE TAX REGISTRATION Sales tax registration is required to import into Pakistan. For registration, Form ST-1is required to send to the local sales tax registration office via post with acknowledgment due.
  • 31. CHAMBER MEMBERSHIP Membership certificate of Chamber of Commerce and Industries or any relevant trade association of Pakistan. SALES TAX ON IMPORT Sales tax chargeable on import of Pakistan. Every importer is required to pay sales tax on taxable goods at the rate of 16-18% at the time of importation. "Taxable Goods" means all goods other than those which have been exempted from Sales Tax.
  • 32. NEXT PRESENTER IQRA
  • 33. INCENTIVES FOR EXPORTS A - Credit Based Incentives  Short Term Financing  Long Term Financing B - Credit Enhancement Incentives  Pakistan Export Finance Guarantee
  • 34. Short Term Financing Export Finance Scheme (EFS) . Short-term working capital facility for 180 days to increase the exports Scheme operates in two parts. Part-1 is the transaction based while part 11 is performance based
  • 35. Transaction based facility Coverage to the extent of 100% of export order/LC/contract. Facility is available at both Pre & Post shipment stages to direct exporters (DE)- Available for 180 days Facility available to Indirect exporters(IE) at Pre-shipment stage only-: Available for 120 days Performance required against every transaction
  • 36. Performance Based Facility is available to Direct Exporters only Exporters are allowed a revolving cash credit limit equivalent to 50% of their total value of goods exported in the previous year. Performance is determined on the basis of export of eligible items made in previous year under both parts of EFS The exporter can avail facility for the maximum period of 180 days.
  • 37. Long Term Financing-Export Oriented Projects. Scheme for Long Term Financing for the Export Oriented Projects (LTF-EOP)” would allow the eligible financial institutions to provide funding facilities to the export oriented units, who meet the financing criteria, on attractive terms and conditions for import of machinery, plant, equipments and accessories (not manufactured locally).
  • 38. B - Credit Enhancement Incentives Pakistan Export Finance Guarantee The Pakistan Export Finance Guarantee agency, PEFG has been established with a view to enhance the access of the Small Medium and Emerging Exporters to bank credit. The PEFG aims to provide a comprehensive range of export trade finance guarantees, including both preshipment and post shipment, to exporters
  • 39. EXPORT PROCESSING ZONE IN PAKISTAN The Export Processing Zones Authority (EPZA) was established in 1980 by the Government with the mandate to plan, develop, manage and operate export processing zones in Pakistan. The Authority is an autonomous body and functions under the Ministry of Industries, Production & Special Initiatives and is administered by a Board of Directors headed by a Chairman. The Authority has since been pursuing an extensive industrial programme for setting up EP Zones in the country
  • 40. Karachi Export Processing Zones – Phase I is fully developed while phase II is being developed on 100 acres of land EPZ,s at Risalpur ,Sialkot and Gujranwala are being developed under Joint Venture arrangements. Some exclusive project are also converted into EPZ are Saindak EPZ,Duddan (DEPZ),Reko Diq EPZ and Tuwairqi EPZ
  • 41. Incentives Free movement of capital No minimum or maximum limit for investment Duty free imports of machinery, equipment and material No sales tax on electricity and gas bills Obsolete/old machinery can be sold in domestic market of  Pakistan after Payment of applicable duties and taxes. Freedom from National import restrictions Foreign Exchange control regulations of Pakistan not applicable. Production oriented labor laws to be solely regulated by the authority.  Relief from double taxations subject to bilateral agreement
  • 42. NEXT PRESENTER FAREEHA
  • 43. CHALLANGES External Factors •Economic downturn in our major markets •Consumer confidence erosion in USA •Economic slowdown •Buyers’ perception of Pakistan as a supplier of low quality products and inability to deliver in bulk and in time •Negative travel advisories
  • 44. Internal Factor  Large Scale Manufacturing growth declined  Long term structural issues  Rapid change in monetary policy  Competition in export market  High cost of finance  Law and Order  Energy Crisis (Electricity and Gas)  Lack of International Competitiveness  Investment declined
  • 45. Opportunities  Favorable market access owing to bilateral 19 trade agreements  Potential of doubling the value- addition of cotton of which Pakistan is the 4th largest producer  Strong resource base in many sectors (food, building stones, gems & jewelry, leather, rice, cement, light engineering)  Growing Services Sectors
  • 46. Export measure  Herbal Health supplements  Export of handicrafts  Export of Halal food Products  Automobile sector  Development of Export Clusters  Export Quality & Standard
  • 47. CONT’D  Federal Export Promotion Board  Trade dispute settlement  Trade Development Authority of Pakistan (TDAP) Management Efficiency Northern Areas Export facilitation Trade Diplomacy
  • 48. Import Strategy and Measures  Import of mobile transit mixtures / Dumpers  Import of used buses  Used cryogenic containers  Secondhand / used cement bulkers  Import of Prime Movers
  • 49. CONT’D  Import of Used Dump trucks  CFC based compressors  Import of Static Road Rollers  Imports from India  Import of CNG busses from India
  • 50. THANK YOU