MARKET ANALYSIS

ALL SET TO EXEMPT CHINESE AGRI DRONES FROM TAXES

The Economic Coordination Committee (ECC) of the Cabinet which is scheduled a meeting to grant exemption of all taxes on drones gifted by China for agriculture sector, and supply of flour and rice to Syria as humanitarian assistance. In this regard, the MNFS&R requested the Chinese Ambassador for provision of drones for controlling desert locusts in Pakistan. Consequently, after mutual consultation, a formal request was made through Ministry of Economic Affairs to China for provision of drones. Thereafter, Ministry of Agriculture and Rural Affairs (MARA) China donated twelve drones to the Department of Plant Protection (DPP), which were handed over to the Pakistani Mission at Beijing. The drones which were to be transported by the National Disaster Management Authority (NDMA) remained parked in a warehouse in China due to the COVID pandemic restrictions worldwide and other reasons.

MNFS&R with the assistance of Ministry of Foreign Affairs (MOFA), Pakistan has now made all the arrangements for transportation of these drones by ship. The requisite cost has already been approved and a sanction letter issued for transfer of these funds to MOFA. At present, there are various taxes/duties/levies/port charges such as Federal Excise duty, sales tax, withholding tax, import duties, etc., applicable on the import of drones. Federal Board of Revenue (FBR) was consulted on the issue and allowed tariff exemptions upon the recommendation of the Federal Government. In addition, Government of Sindh was also consulted and they have informed that the import of drones is not liable to Sindh Sales Tax under the Sindh Act of 2011. MNFS&R has proposed that all applicable taxes/duties on the import of drones, donated by the People’s Republic of China to Pakistan, may be waived off.