Reap team meets Prime Minister, seeks withdrawal of 3.5 percent WHT on rice

The Rice Exporters Association of Pakistan (Reap) has demanded withdrawal of 3.5 percent withholding tax on local purchase of rice and repayment of Export Refinance loans in 360 days instead of current 180 days. The demand was made by a delegation led by Reap Chairman Rafique Suleman during a meeting with Prime Minister Nawaz Sharif in Islamabad on Friday.

Suleman thanked the Prime Minister for meeting with the Reap delegation and other representatives of the trade and industry. Federal Finance Minister Ishaq Dar, Commerce Minister Khurram Dastgir and Information Minister Pervez Rasheed were also present in the meeting. The Reap Chairman told the meeting that the country’s rice export sector had shown an outstanding performance during a very short span of time and made possible a massive surge in the rice export. “With the struggle and efforts of the exporters, our rice exports reached $2 billion in FY15, compared to only $300 million about ten years back,” he added.

On behalf of Reap, the Chairman presented detailed proposals and suggestions for the survival and growth of rice export sector. “We assure to expand rice exports to over $4 billion within next three years if our suggestions/proposals accepted by the government,” he pledged.

The following proposals were presented during the meeting:

1) Payback period for all SBP based Export Refinance loans including FE-25 based loans should be extended to 360 days from current 180 days and any penalty incurred may be waived.

2) Withholding Tax on rice should be reduced to 0.25 percent from current 1 percent to give relief to exporters.

3) Withholding tax of 3.5 percent on local purchase of rice should be withdrawn.

4) Rice milling should be given the status of an industry and same concessions be extended to it as already enjoyed by textile sector including reduced power and gas loadshedding besides Zero rating of GST.

5) In the current trade policy, the membership of Rice Exporters Association of Pakistan (Reap) is mandatory which must be continued in the next trade policy for the year 2015-18.

6) The intervention of Trading Corporation of Pakistan/Passco in rice trade should be ended, as in 2008 Passco purchased rice which is still not sold by it and incurring billions of rupees loss to the national exchequer.

7) Rice research institutes at Kala Shah Kaku and Dokri must be privatised. Otherwise the government must facilitate Reap in setting up its own rice research institute.

8) To protect the export of Basmati rice, the markets of Iran and Saudi Arabia must be focused, as these are the largest importers of Basmati rice.

9) To protect the export of Non-Basmati rice, the focus must be laid on the markets of China, Philippines and Indonesia, as these countries are the major buyers of this rice.

10) The rice export sector should also be given GSP status, as given to textile sector.

11) The rice mills must be exempted from gas and electricity loadshedding during the period from October 2015 to February 2016, so that the export targets could be achieved.

12) Rice must be included in the list of items under Free Trade Agreements (FTA) with different countries, so that a substantial quantity of rice may be exported.

13) A sui generis geographical indications law should be enacted and TDAP must be given the mandate to own Basmati rice geographical indications tag on behalf of all the stakeholders and ownership of Basmati rice should be disallowed to any private sector entity.

14) To control the falling prices of rice, Reap suggests direct subsidy to farmers, or there is also an option to give subsidy to rice exporters, so that they can export rice with competitive rates.

15) It is imperative that a Rice development board or council is formed as a unified platform that includes federal and provincial authorities besides public and private sector research including molecular science in addition to agriculture extension. As well as all stakeholders, namely, growers, millers and exporters to formulate policies and monitor demand driven evolution of high yielding varieties of rice.

16) The rice research Institute should work on minimising the input cost and increase the yield and quality of the country’s rice.



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