Economic Cooperation Committee Extends the Export Package for Three Years
Subject: ECC Extends the Export Package for Three Years
- Economic Coordination Committee (ECC) of the Cabinet, chaired by the Prime Minister, Shahid Khaqan Abbasi in its meeting held today has approved the extension of Prime Minister’s Export Package for the next three years i.e. Upto 30th June 2021. The Package aims at improving the competitiveness of the textile and non-textile export sector to continue the export growth in the coming financial years.
- The PM’s Export Package was initially approved in January 2017 for a period of 18 months i.e. till June 2018. The Package has vitally contributed towards the turnaround in exports in FY 2018 which had been continuously declining since FY2014. During the first ten months of the current financial year i.e. July-April 2017-18, the exports have registered an increase of 14% compared with the corresponding period of the previous year. It has contributed additional US$ 2.3 billion foreign exchange earnings during this period. The additional gains are estimated to be around US$ 2.7 billion by the end of the financial year 2017-18.
- Therefore, in order to maintain the growth momentum in exports, the ECC of the Cabinet has extended the Package for the next three years with improvements. In order to improve competitiveness and incentivize investment in export-oriented production, the Drawback of Local Taxes and Levies (DLTL) has been extended, on the same terms and conditions, for the commercial and manufacturer exporters. The zero rating of textile machinery imports and withdrawal of duty on manmade fibre other than polyester has been continued. Besides, in order to encourage more non-traditional sectors, electric fans, electrical appliances, electricity equipment and cables, transport equipment including motor bikes, sports bags, leather products e.g. leather wallets, auto-parts, stationery, furniture, fresh fruits & vegetables, meat & meat preparations including poultry, juices & syrups have also been included in the package.
- The Export Package approved by the ECC is in addition to the three other relief measures announced by the government for the export sector: in the recent budget the government has included packaging material in the zero-rating regime for sales tax in respect of the five export-oriented sectors i.e. textile, leather, sports goods, surgical goods and carpets; the Federal Government has extended the duration of Rs 3 per unit subsidy under Industrial Support Package (ISP) for another three months; and the import duty on 255 out of 484 items of raw material and machinery proposed by the Ministry of Commerce has been reduced during the Budget 2018-19.
- The extension of the PM’s Export Package for the value-added and non-traditional products and non-traditional markets for a period of 3 years will provide predictability to local and foreign investors to invest in export-oriented production capacities.
- These components of the exports package are estimated to provide competitiveness benefits of around Rs. 65 billion annually (including Rs. 41 billion in Drawback of Local Taxes and Levies) to the export sector.