Taxation

Collector of Customs, Model Customs Collectorate (Appraisement) Lahore, Muhammad Jamil Nasir, claimed on Thursday that customs duty collection has registered an increase of 36 percent per annum because of the reforms he has introduced at the dry ports. “This 36 percent per annum increase in revenue is higher than the national growth of revenue which is around 22 percent at present,” he added. Interestingly, he added that the overall growth of duties and taxes has increased to 28 percent at three dry ports in the city of Lahore which is lurking at nearly 8 percent countrywide.

Talking to Business Recorder, he said tackling a situation arising out of the imposition of 0.9 percent infrastructure road cess by the government of Punjab in 2016 proved the tipping point of achieving such a marvellous revenue growth results.

He pointed out that achievement of revenue target and tackling the issue of 0.9 percent infrastructure road cess were two major issues when he took charge as collector. “Manufacturers and importers were objecting to the cess, pleading that it was adding to their cost of business in Punjab as no such cess is being charged at the Karachi Port.”

He said this situation created disincentive for manufacturers and importers and they started preferring the Karachi Port. “Retaining business was a real challenge when I took charge at Mughalpura Dry Port in 2017. The cess was imposed in 2016 and its trickledown effect started irritating importers gradually,” he said.

The Federal Board of Revenue (FBR), on the other hand, was demanding more revenue by the end of every fiscal year. He introduced the idea of trade facilitation to compensate the impact of 0.9 percent cess through speedy clearances and abolition of informal payments to the customs staff at dry ports. He said right person for the right job strategy was adopted to meet the purpose. Meanwhile, new induction through FPSC got in, and Jamil appointed them on key positions despite a resistance. A post verification cell was set up to control any compromise of duties and taxes as the newcomers were not well-versed with the assessment process.

He further mentioned that all the Collectorate at three dry ports, including Mughalpura Dry Port, Thokar Niaz Baig Dry Port and Prem Nagar Dry Port, has become corruption-free dry ports. “Not a single informal payment is made on these ports which was very normal in the past.” He said the FBR supported him in this respect that led to success of this model at dry ports.

He said the concept of Feed and Suggestion Tool (FAST) was also introduced by him in February 2018. It was a simple application. Soon a clearance or any other transaction takes place from this port, the agent/importer will receive a message from the Collector inquiring whether he was forced to grease the palm during the process. The FAST has also broken down the monopoly of clearing agents as they could not fleece money from importers and manufacturers in the name of clearance from ports. “On 16th July, the FBR had implemented this tool countrywide,” he told with a deep sense of pride.

He also focused on infrastructure. He had set up a laboratory at the port. It would be a state of the art lab. It would be connected through the concept of reducing cost of doing business and duty and taxes. He was sending products to Karachi port or PSCIR for testing purposes. Delay was causing demurrage to the customers. Therefore, we decided to resolve the issue once and for all and set up a lab with the cost of Rs 7 million.

He has also established a state of the art library at the port including books of relevant law and judgments of various past years. Similarly, a conference room with all modern tools to conduct out of station video conferences is in place. Jamil said this whole process has been completed successfully in a short period of four months.

Taxation

Pakistan generates 86 percent of its total federal tax revenue from its three major cities as Karachi contributes 55 percent, Islamabad, 16 percent, and Lahore’s share in revenue is 15 percent. This was revealed by report of the State of Pakistani Cities (SPC) launched by the Ministry of Climate Change with the technical assistance of the United Nations Human Settlements Programme (UN Habitat) here on Thursday.

The report presented the current state of development in the 10 largest cities of Pakistan and pinpointed the state of economy, social service delivery, planning and development, housing, environment and heritage in the cities of Pakistan. The State of Pakistani Cities (SPC) report is spearheaded by the Ministry of Climate Change with the technical assistance of the United Nations Human Settlements Program (UN Habitat) and is funded by the Australian government. The report covered the underlying socio-economic drivers contributing to the local development needs of Pakistan.

According to census 2017, 75 million people live in urban areas of Pakistan and 54 percent of the total urban population lives in the 10 cities of Pakistan. The report ascertained that larger cities have seen enormous urban sprawl due to increase in population and change in land use in down town as well as in the periphery of the cities and are becoming extended part of the cities.

The report said that the cities vary in terms of their size, economy, employment and tax revenues. Services and industry are the major employment sectors in Pakistani cities; the share of the service economy in the cities is larger than the share of services in the national economy. Pakistan generates 95 percent of its total federal tax revenue from its ten major cities. The average urban per capita income in Pakistan among the ten cities varies from Rs 37, 000-70,000. Poverty in urban areas is a major and visible phenomenon. Six out of the top ten major cities have double-digit poverty figures: Quetta, with 46 percent has the highest poverty rate while Islamabad, with 3 percent has the lowest poverty rate.

Access to clean water continues to be a major problem in Pakistani cities. Only 65.2 percent of households in Pakistan’s 10 major cities have access to piped water connections. The cities lack sewage treatment facilities and solid waste management which leads to severe environmental pollution and contamination of surface and ground water bodies. Shortage of power supply remains a persistent problem in harnessing the potential of the socio-economic development of the cities. Further, general understanding and appreciation of the environment and heritage is low among the relevant authorities and other stakeholders.

Increasing urbanization has created pressing demands for housing in cities. The absence of any formal provision for the lower-income urban population and the people migrating from rural areas to urban areas has resulted in the creation of large informal settlements, lacking access to adequate level of services. The report also features data gap in the urban sector in Pakistan as one of the key limitations for sustainable development.

The report emphasizes that Pakistani cities need to plan and manage their development in a better way to meet the needs and demands of their citizens and indeed of the country. To prosper, cities need to be more responsive towards the environment and adopt technologies and economies that are less wasteful and destructive. Thus, taking a more realistic approach to development that meets the demands of the present without compromising the ability of future generations to meet their own needs.

The UN-Habitat Pakistan also launched its Habitat Country Programme (HCP), Pakistan 2018-2022. The HCP prepared and aligned with the Pakistan Vision 2025, United Nations Sustainable Development Framework (UNSDF) One UN Programme (OP-III) and New Urban Agenda. It lays down the roadmap for achieving SDG 11 and other crosscutting SDGs. The key objectives of the programme include promoting socio-economic growth, improving access to affordable housing, energy, water and sanitation and other basic services, development of policies and regulatory instruments for sustainable urbanization and reduction of the impact of disasters and climate change.

Federal Minister for Climate Change, Muhammad Yusuf Shaikh in his remarks reiterated commitment of the government of Pakistan to formulate the national and provincial urban policies through participatory approach to arrive at viable solutions for climate resilient urban development in the country and support measures to implement SDG 11 for inclusive, safe, and resilient cities. The State of Pakistani Cities Report, 2018 provides the basis for continued collaborative action to develop common and consistent actions, policies and strategies which will ensure that the outcomes are pragmatic and reflect the ground realities across the country.

Dr Shamshad Akhtar, Ministry of Planning, Development and Reforms in her address highlighted that Pakistan is fortunate to have 31 percent of its population consisting youth in age bracket of 15-29 years. This “youth bulge” provides a unique opportunity for utilizing their potential in contributing to urban economic development. Value generated by the urban economy needs to be equally shared through innovative and integrated financial mechanisms to ensure sustainable flow of finance necessary for cities to meet the needs and provide opportunities for all. Sustainable and inclusive urban economies can be created by promoting urban strategies and policies that strengthen the capacity of cities to realize full potential as drivers of socio-economic development.

The report launching ceremony was attended by Federal Minister for Climate Change Muhammad Yusuf Shaikh and Federal Minister for Planning Development and Reforms, Dr Shamshad Akhtar, UN Resident Coordinator Neil Buhne, Australian High Commissioner Margaret Adamson and other high-level officials.