LAHORE - As trade deficit of the country has reached all-time high of $30 billion for the first time in the history of Pakistan in the last fiscal year, the Pakistan Poultry Association has proposed the government to allow at least 50 percent freight subsidy on air as well as sea freight cost incurred on exports of poultry and its products to enhance exports so that the huge gap between import and export could be bridged as a short time measure, as poultry has great potential of export.

PPA (NZ) Chairman Dr Abdul Karim, in his letter written to the federal ministry of commerce, ministry of finance and Trade Development Authority of Pakistan, has observed that presently, international trade volume of halal food is around $300 billion, whereas Pakistan has negligible share, despite the fact that Pakistan’s poultry products are itself Halal brand and poultry sector has potential to produce chicken meat and eggs as much as required to get 10-15% share of world trade of halal food products. PPA believes that poultry sector can export halal products and can play its affirmative role to increase exports like textile to get maximum foreign exchange for the country.

“There is dire need to bring down the cost of locally produced poultry & its products, one of the major barriers in its exports from Pakistan. It will enable producers to offer competitive prices in international market to get maximum exports orders,” he said. He urged the government to take measures to enhance exports of poultry products from Pakistan.

The major import duty and taxes levied on inputs, included 18 percent import duty/tax on vaccines/medicines, 22 percent import duty on poultry feed ingredients, 58 percent import duty on chicken food ingredients and 17 percent sales tax on electricity.

Dr. Abdul Karim said that all these duties levied on the import of different inputs plus sales tax on electricity bills levied at different stages which are paid by various venders, are passed on to the producers of exportable products. As producers are unable to claim these duties so resultantly these added to inputs as duty drawback.

Therefore PPA proposed the government to allow duty drawback on different exportable poultry products.

LCCI president and former chairman of PPA Abdul Basit said that although most of the exporting countries provide subsidies on export of halal poultry meat and its products, but there is no subsidy available to our exporters. He claimed that India, one of the biggest competitors to Pakistan poultry exports, extends significant amount of reimbursements of transport costs, under its freight subsidy scheme, to its exporters.

To make available level-playing field in international market for exporters, he strongly proposed that government should allow at least 50% freight subsidy on the freight cost (air-freight as well as sea-freight) incurred on exports of poultry & its products.

Abdul Basit said that PPA gave presentation to Ishaq Dar, former Minister for Finance, Haroon Akhtar Khan, former Special Assistant to PM on Revenue, and Dr. Muhammad Irshad, Chairman FBR in this regard. Principally all dignities agreed with PPA point of view and assured to review and resolve the matter of higher import duty and taxes i.e. 58% imposed on raw material (ingredients) for chicken products as compared to the import duty i.e. 31% on the finished products.

However, federal government further enhanced the regulatory duty from 15% to 20% on the ingredients for chicken products through an amendment via SRO 505(I)/2017 dated 21.06.2016, instead of rationalizing the duty structure on raw material as proposed by the industry.

He suggested to rationalize custom duty and exempt sales tax on ingredients (inputs) for producing valued added, further processed chicken products (ready to cook & fully cooked).