The Chairman of All Pakistan Paper Merchants Association (APPMA), Muhammad Saleem Memon, has urged Prime Minister Yousuf Raza Gilani to withdraw the regulatory duty imposed on paper and paperboard, and reduce customs duty in the forthcoming budget. He said that import of paper board is subjected to 25 percent import duty and 15 percent regulatory duty, 18 percent sales tax, 2 percent withholding tax, and one percent special excise duty, which is on higher side.
He said that after imposition of such high duties, legitimate import of paper and paper board dropped from 64,054 tons in the year 2008 to only 19,000 tons in 2009, and in the first quarter of 2010 import stood onlat y 50 tons.
Besides, reduction of import also adversely hit revenue collection which has dropped from Rs 1.6 billion in 2008 to Rs 527 million in 2009 and in first quarter of 2010 it was just Rs 0.15 million or government suffered a revenue loss of Rs 1.07 billion in the year This is an alarming figure in view of the budget deficit of the current year, he added. Expected loss of revenue collection in this head is around Rs 1 billion in 2010.
He said that huge quantity of paper and paperboard was coming illegally into Pakistan from Afghanistan and other border countries to fill the gap between demand and supply. The chairman said that total demand of paperboard is approximately 850,000 tons per year, whereas total domestic production is approximately 500,000 tons per year and the gap between demand and supply is 350,000 tons, while the legal import is very limited.
He said that import tariff in Pakistan as compared to other countries of the world is highest at 25 percent, in India and Vietnam it is 10 percent, in China, Japan and Singapore it is zero, in Thailand, Indonesian and Malaysia it is 5 percent and in Iran it is 4 percent.
Saleem Memon said that due to high cost of paper and paperboard Pakistan’s export of printing material had fallen drastically as it is no more economically viable for the printing industry to import costly paper and paperboard and compete with other countries of the world in international market. He said that unless immediate remedial action is taken in the upcoming budget of 2010-11, the imports of paperboard will cease and ancillary industry will collapse.
Referring to education, Saleem said that Pakistan is a nation with less than 50 percent literacy rate and is currently ranked 160th in world literacy. Paperboard is an essential item and it has an imperative use in education materials. The rising cost of such paperboard products, which contribute to and enhance learning, is fatal to the vitality of the education sector as well.
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