SLAMABAD (Eshfak Mughal) :- Pakistan Government will bear Rs46 billion revenue loss for the Free Trade Agreements and Preferential Trade Agreements with different friend countries including China, Sri Lanka, Malaysia and Indonesia for next fiscal year due to tax exemptions granted on imports from these nations.
The Federal Board of Revenue (FBR) has calculated the revenue amount involved in tax exemptions which were given under the FTAs and PTAs with different countries for next fiscal year.
The FBR’s projection shows that the government has given Rs34.6 billion tax exemptions to China under general exemptions on import from China under Pak-China Free Trade Agreement through SRO 1640(I)/2019, SRO 659(I)/2007 Table-I, SRO 659(I)/2007 Table-II and 1296(I)/2005 Table-II.
This is the highest cost of any FTA by the Government of Pakistan despite the fact that the Chinese share in bilateral trade with Pakistan is bigger than Pakistan.
The government has also given tax exemption worth of Rs4.03 billion on general exemptions on import from Indonesia under the Pak-Indonesia PTA through SRO741(I)/2013.
The cost of Preferential Trade Agreement with Malaysia has also Rs3.77 billion as government has granted general tax exemptions on import from Malaysia for next fiscal year under PTA through SRO1261(I)/2007.
The government has also granted Rs3.36 billion tax exemptions by general exemption on import from Sri Lanka through Pak-Sri Lanka FTA under four different SROs.
The government has also given tax exemption worth of Rs287 million on import from SAARC nations including India, Bangladesh, Afghanistan, Nepal, Sri Lank and others through South Asian Free Trade Agreement (SAFTA) under the SRO 1274(I)/2006.
The FBR estimated Rs34 million tax exemptions on import from SAARC countries through Free Trade Agreement under the SRO 558(I)/2004.