Beijing expresses concerns over delay in tax rebate

Islamabad:

The Chinese government has raised concerns over a delay of more than a year in granting a one-time tax exemption on equipment and furniture donated to the Gilgit-Baltistan (GB) police.

The matter was discussed at a recent meeting of the Economic Coordination Committee (ECC) where it was pointed out that Beijing is concerned about the delay in tax relief as the matter has been pending for the past 14 months.

The Ministry of Kashmir and Gilgit-Baltistan informed the economic decision-making body that the Immigration Department of China had donated office equipment and furniture to the British police on 21 January 2022. Due to Covid-related restrictions, the goods could not be cleared through customs. from Sost Customs Port, Hunza.

Now, for clearance by Customs, Ministry of Home Affairs and Prisons, Political Secretariat, Government of United Kingdom has sought recommendations from the Federal Government for grant of one-time exemption from all types of duties and taxes under Pakistan Customs Tariff.

The ECC was apprised of the relevant provision of the Pakistan Customs Tariff provided in the Pakistan Customs Act, 1969, which defined “goods received as a gift or donation from a foreign government or agency from the federal or provincial government or any public sector body subject to on the recommendation of the Federal Government and concurrence of the Federal Board of Revenue (FBR)’. According to the above provision, the FBR had agreed to the proposal subject to the recommendations of the federal cabinet, the Ministry of Kashmir Affairs and Britain said.

He asked the ECC to grant a one-time exemption from all kinds of duties and taxes on the import of office equipment and furniture donated by the Immigration Department of China. The ECC discussed the case clearly and observed that details of the taxes to be levied on office equipment and furniture were not provided in the ministry’s summary.

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It was also noted that, in principle, there should be no tax relief for such imports by government agencies as it would create a distortion in the tax regime. It could also encourage private sector organizations to demand the same treatment from government. Therefore, the policy on such tax exemptions should be revised.

It was suggested that the matter be resolved without further delay. The ECC agreed on the proposed tax exemption with the direction to the Ministry of Kashmir Affairs to communicate to the Finance Department details of duties to be calculated by the FBR.

The ECC considered the brief submitted by the Ministry of Kashmir Affairs titled “Exemption from all kinds of taxes on import of office equipment and furniture donated by the Immigration Department of China to the British Police through Land Route” and approved the proposal.

He directed the ministry to submit to the ECC chairman the amount of duties and taxes to be calculated by the FBR.

Published in The Express Tribune, November 26^u2023.

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